U.S. Natural Gas Rises After Dropping on Milder Weather
Natural gas futures fluctuated in New York after a government report showed a stockpile gain last week that exceeded analysts’ estimates.
Gas moved between gains and losses after the Energy Department said U.S. inventories increased by 77 billion cubic feet in the week ended Sept. 28 to 3.653 trillion, below the five-year average gain for the week of 78 billion. Analyst estimates compiled by Bloomberg showed an expected increase of 73 billion.
Natural gas for November delivery slid 0.9 cent, or 0.3 percent, to $3.386 per million British thermal units at 10:34 a.m. on the New York Mercantile Exchange. Gas was trading at $3.423 before the government report was released at 10:30 a.m. in Washington. The futures are down 6.9 percent from a year ago.
A supply surplus to the five-year average fell to 8.3 percent for the week ended Sept. 28 from 8.6 percent the previous week, the department said.
The gap has narrowed from 61 percent at the end of March, the most in six years. Power plantshave been burning a record amount of gas as they switched from costlier coal and the third- hottest summer from June through August boosted cooling demand.
Below-normal temperatures in central and eastern states over the next 10 days will be followed by a warming trend, according to Commodity Weather Group. The Bethesda, Maryland- based forecaster said the central and western U.S. will see above normal temperatures Oct. 14 through Oct. 18 with usual readings along the East Coast.
“The market still has ample supplies of gas, that’s why everything is going to be contingent on the weather forecast,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Gas inventories will rise to a record of 3.95 trillion cubic feet by the end of October, before the peak winter demand season begins, the Energy Department said in its Sept. 11 Short- Term Energy Outlook.