Dec. 7 (Bloomberg) -- Natural gas futures were little changed in New York amid speculation that supplies will be ample to meet demand for the heating fuel.
Futures were steady as the number of rigs drilling for gas rose by 8 to 961 last week, according to data published Dec. 3 by Baker Hughes Inc. Inventories of the heating and power-plant fuel were 10 percent above the five-year average for the week ended Nov. 26, according to the Energy Department.
“Production levels are pretty high,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We’re going to need to see sustained cold weather across the next four to six weeks and a little bit of sympathy support from the continued rise in the oil market to lift gas above $5.”
Natural gas for January delivery rose 0.5 cent to $4.493 per million British thermal units at 12:08 a.m. on the New York Mercantile Exchange. Gas futures reached $5.545 per million Btu, the highest intraday price since Aug. 9. The futures have dropped 19 percent this year.
The number of oil and natural-gas rigs operating in the U.S. jumped to a 23-month high last week, gaining 26 to 1,713, according to Baker Hughes. The surplus of gas in storage over the five-year average has expanded in eight of the past 10 weeks.
The Energy Department reported Dec. 2 that 23 billion cubic feet of gas were withdrawn from stockpiles in the week ended Nov 26, below the five-year average reduction of 36 billion. Stockpiles totaled 3.814 trillion cubic feet.
Colder-than-normal weather is likely in the Northeast, Midwest and Southeast through Dec. 16, according to Commodity Weather Group in Bethesda, Maryland. Temperatures may be below-normal in the Southeast and parts of the mid-Atlantic and Great Lakes regions from Dec. 17 through Dec. 21, the company said.
The low temperature in New York on Dec. 16 may be 26 degrees Fahrenheit (minus 3 Celsius), 5 degrees below normal, according to AccuWeather Inc. in State College, Pennsylvania. The low in Chicago may be 14 degrees, 8 below normal.
“It’s definitely cold here,” said Rich Ilczyszyn, a broker with Lind-Waldock in Chicago. “We’re looking at bigger and bigger withdrawals from storage. We have a surplus in inventories, but those supplies are tightening.”
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