Investing.com - Natural gas futures ended Friday's session
higher, as market players continued to focus on shifting weather
forecasts for the next few weeks to gauge the strength of U.S.
heating demand.
Natural gas prices have closely tracked weather forecasts in recent
weeks, as traders try to gauge the impact of shifting forecasts on
winter heating demand.
On the New York Mercantile Exchange, natural gas futures for
delivery in February jumped 1.55% Friday to settle at USD3.465 per
million British thermal units by close of trade.
The February contract touched a high of USD3.486 per million
British thermal units earlier in the session.
On the week, natural gas prices were little changed.
Natural gas prices found support after extended weather forecasts
showed colder weather descending across most parts of the U.S. in
the first two weeks of January.
The lower 48 states will experience cooler-than-normal temperatures
in the next 10 days, according to various weather services, which
should prompt more households and businesses to turn up the
heating.
Bullish speculators are betting on the cold weather boosting winter
demand for the heating fuel. The heating season from November
through March is the peak demand period for U.S. gas consumption.
Earlier forecasts made this week predicted slightly warmer
temperatures in store for the U.S., which pushed prices down in
earlier sessions.
Meanwhile, the U.S. Energy Information Administration said Friday
that natural gas supplies fell less-than-expected last week.
The U.S. EIA said in its weekly report that natural gas storage in
the U.S. in the week ended December 21 fell by 72 billion cubic
feet, compared to expectations for a decline of 76 billion cubic
feet.
Inventories fell by 87 billion cubic feet in the same week a year
earlier, while the five-year average change for the week is a
decline of 140 billion cubic feet.
Total U.S. natural gas storage stood at 3.652 trillion cubic feet
as of last week, 2.5% higher than last year's level and 13% above
the five-year average for this time of year.
Early withdrawal estimates for next week's storage data range from
100 billion cubic feet to 141 billion cubic feet.
Inventories fell by 77 billion cubic feet in the same week a year
earlier, while the five-year average change for the week is a
decline of 111 billion cubic feet.
The EIA report was delayed by one day this week due to the
Christmas holiday and will be delayed by one day again next week
due to the New Year holiday.
The heating fuel has lost nearly 14% since touching a 14-month high
of USD4.001 per million British thermal units on November 26, on
speculation that temperatures won't be cold enough to erase a
surplus of the fuel in storage.
Elsewhere in the energy complex, light sweet crude oil futures for
February delivery settled at USD90.69 a barrel by close of trade on
Friday, adding 2% on the week.
Meanwhile, heating oil for February delivery rose 0.45% over the
week to settle at USD3.024 per gallon by close of trade Friday.
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