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Natural Gas edges off 5-week low as forecasts point to warmer weather

Published 02/11/2013, 02:53 PM
Updated 02/11/2013, 02:54 PM

Investing.com - Natural gas futures edged up from a 5-week low hit earlier when weather services issued forecasts for a warming trend to settle into the central and northeastern parts of the U.S.

On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD3.283 per million British thermal units, up 0.34%.

The commodity hit a session low of USD3.208 and a high of USD3.393.

Prices fell earlier after weather services indicated that colder-than-normal temperatures gripping much of the country were set to thaw, though bargain hunters nudged the commodity back into positive territory.

Updated weather forecast models pointed to a warming trend setting over the heavily populated Northeast and Midwestern areas of the country, with warmer to near-normal temperatures becoming the norm in the next six to 10 days.

Winter storms and arctic blasts of cold air have kept prices high for days.
Natural gas futures are very sensitive to weather reports in the U.S. winter.

The U.S. heating season running from November through March sees peak demand for gas.

About half of U.S. households use gas for heating purposes, according to Energy Department data.

Prices also moved lower after U.S. Energy Information Administration reported that natural gas supplies fell less than anticipated last week.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Feb. 1 fell by 118 billion cubic feet, less than expectations for a drop of 132 billion cubic feet.

Inventories fell by 94 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 165 billion cubic feet.

Total U.S. natural gas storage stood at 2.684 trillion cubic feet as of last week. Stocks were 226 billion cubic feet less than last year at this time and 351 billion cubic feet above the five-year average of 2.333 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 118 billion cubic feet above the five-year average, following net withdrawals of 88 billion cubic feet.

Stocks in the Producing Region were 174 billion cubic feet above the five-year average of 819 billion cubic feet after a net withdrawal of 20 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were up 1.29% and trading at USD96.95 a barrel, while heating oil for March delivery were down 0.17% and trading at USD3.2329 per gallon.





 

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