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U.S. natural gas bounces off 3-month low on bets for bullish storage data

Published 02/15/2017, 09:46 AM
© Reuters.  U.S. natural gas bounces off 3-month low

Investing.com - U.S. natural gas futures rose for the first time in four sessions on Wednesday, bouncing off the lowest level since November as traders looked ahead to weekly storage data to gauge supply and demand levels.

Natural gas for March delivery on the New York Mercantile Exchange rose 5.6 cents, or around 1.9%, to $2.960 per million British thermal units by 9:45AM ET (14:45GMT), after losing 3.9 cents, or 1.3%, a day earlier.

Prices of the heating fuel sank to $2.887 on Tuesday, a level not seen since November 21, amid forecasts for warmer weather in key regions across the U.S. during the next few weeks.

The natural-gas market is on the defensive in recent days after forecasting models showed cold air exiting the Northeast, with the updated 6-10 day forecast looking warmer than a day ago.

Prices of the heating fuel are down almost 21% since the start of the year as forecasts for warm winter weather weighed on heating demand expectations.

Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns.

About half of U.S. homes use natural gas for heating.

Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw of 130 billion cubic feet in the week ended February 10.

That compares with a withdrawal of 152 billion cubic feet in the preceding week, 163 billion a year earlier and a five-year average drop of 156 billion cubic feet.

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Total natural gas in storage currently stands at 2.559 trillion cubic feet, according to the U.S. Energy Information Administration, 11.3% lower than levels at this time a year ago and 1.8% above the five-year average for this time of year.

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