Investing.com - Natural gas futures ended Friday's session up
more than 4%, as forecasts showing colder weather in the coming
week boosted near-term demand expectations for the heating fuel.
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 4.25% Friday to settle at USD3.328 per
million British thermal units by close of trade.
On the week, natural gas prices added 1.2%.
Updated weather forecasts released Friday showed that
colder-than-normal weather was expected across key parts of the
U.S. later in January and into early-February, boosting sentiment
on the heating fuel.
Weather service provider MDA Weather said that it expected
temperatures to fall below normal in the Northeast and Great
Lakes-region of the U.S. from January 21 through January 25.
Weather forecaster AccuWeather expected temperatures in New York to
fall to 22 degrees Fahrenheit (minus 6 Celsius) on January 21, five
degrees lower than usual.
Forecasts originally called for mild winter weather during the
period.
Bullish speculators are betting on the cool weather increasing
winter demand for the heating fuel.
The heating season from November through March is the peak demand
period for U.S. gas consumption. Nearly 50% of all U.S. households
use gas for heating.
Meanwhile, Thursday's larger-than-expected drawdown from winter
inventories also kept momentum to the upside.
The U.S. Energy Information Administration said that natural gas
storage in the U.S. in the week ended January 4 fell by 201 billion
cubic feet, the most since February 2011.
Inventories fell by 95 billion cubic feet in the same week a year
earlier, while the five-year average change for the week is a
decline of 149 billion cubic feet.
Total U.S. natural gas storage stood at 3.316 trillion cubic feet
as of last week, 2.6% below last year's level and 10.7% above the
five-year average for this time of year.
Early withdrawal estimates for this Thursday's storage data range
from 100 billion cubic feet to 143 billion cubic feet.
Inventories fell by 89 billion cubic feet in the same week a year
earlier, while the five-year average change for the week is a
decline of 144 billion cubic feet.
The heating fuel has lost nearly 17% 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 USD93.72 a barrel by close of trade on
Friday, adding 0.7% on the week.
Meanwhile, heating oil for February delivery dipped 0.3% over the
week to settle at USD3.011 per gallon by close of trade Friday.
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