US GAS: Futures Gain As US Gas Inventories Fall
March 15 2012 - 11:37AM
Dow Jones News
Natural gas futures rose Thursday after a weekly government
report showed a larger storage withdrawal from U.S. gas inventories
than analysts had expected.
Natural gas for April delivery rose 2.1 cents, or 1%, to
recently trade at $2.306 a million British thermal units on the New
York Mercantile Exchange. Earlier in the session, prices had been
flirting with fresh 10-year lows.
The U.S. Energy Information Administration said gas inventories
fell by 64 billion cubic feet in the week ended Friday, a larger
draw than the 57-bcf drop a survey of analysts had forecasted.
With natural gas futures near their lowest level in a decade, a
signal that inventories may be declining at a slightly quicker pace
offered a small window to bet on higher prices. But analysts
cautioned that stockpiles remain elevated even as forecasts are
calling for warmer weather ahead.
"This is a short-term reprieve in the bear market," said Phil
Flynn, an energy analyst with PFGBest. "It's given someone a reason
to buy for the first time in several weeks, but considering we're
52% above the five-year average, it's not enough to stop the
onslaught that we've seen."
The weekly report puts natural gas inventories at 2.369 trillion
cubic feet, well above the five-year average of 1.562 tcf. This
time last year, inventories stood at 1.634 tcf.
A mild winter has kept demand for gas-fired heating low, holding
down futures amid a supply glut in the U.S. As the U.S. exits the
coldest part of the year, investors remain concerned that
near-record inventories will keep pressure on prices.
Mild weather is expected to continue for the next month,
according to a forecast Thursday from the National Oceanic and
Atmospheric Administration. And above-normal temperatures are seen
across much of the country through June.
"The super-warm pattern continues to dominate much of the U.S."
said Matt Rogers, President of forecaster Commodity Weather Group,
in reference to the next week.
Without a drop in temperatures, analysts say that next week's
report could show the first injection of natural gas for the
year.
-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155,
jerry.dicolo@dowjones.com