U.S. natural-gas supplies probably declined more than the seasonal average last week as temperatures fell in the Northeast, analysts estimated before a government stockpile report tomorrow.
Inventories dropped 175 billion cubic feet, or 5.3 percent, to 3.115 trillion cubic feet in the week ended Jan. 20, based on the median of 16 analyst estimates compiled by Bloomberg. The five-year average stockpile change for the week is a decrease of 173 billion cubic feet, according to the Energy Department.
Demand for heat averaged 2 percent above normal in the U.S. Northeast last week and 14 percent above normal in the Northwest, according to Belton, Missouri-based forecaster Weather Derivatives. The low in New York on Jan. 19 was 20 degrees Fahrenheit (minus 7 Celsius), 7 degrees below normal, according to AccuWeather Inc. of State College, Pennsylvania.
“It was easily the highest demand of the season,” said Kyle Cooper, director of research with IAF Advisors in Houston, who predicts stockpiles fell 185 billion cubic feet. “The operators are going to try and get more gas out of storage when there is higher demand.”
Gas has rallied 16 percent this week after Chesapeake Energy (CHK) Corp. said it would cut production. The number of rigs drilling for the fuel fell to the lowest level in two years in the week ended Jan. 20, according to data compiled by Baker Hughes Inc.
All of the analysts surveyed by Bloomberg predicted stockpile decreases, with estimates ranging from 140 billion to 185 billion cubic feet. The weekly supply report from the Energy Department’s Energy Information Administration is scheduled for release at 10:30 a.m. tomorrow in Washington.
Natural gas for February delivery fell 32.7 cents, or 12 percent, to $2.343 per million British thermal units last week on the New York Mercantile Exchange. Gas today jumped 17.5 cents, or 6.9 percent, to settle at $2.729 per million Btu. Gas fell to $2.231 Jan. 23, the lowest intraday price since February 2002.
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