U.S. natural-gas stockpiles increased by 1.8 percent last week as mild weather kept fuel demand near seasonal norms, according to analyst estimates compiled by Bloomberg.
Inventories rose by 45 billion cubic feet to 2.557 trillion in the week ended April 20, based on the median of 21 estimates. The five-year average change for the week is an increase of 47 billion, according to the Energy Department, which is scheduled to release its weekly supply report tomorrow.
“You had a demand decrease on the heating side because temperatures got warmer, but the decrease was not as big,” said Anthony Yuen, a natural-gas strategist at Citigroup Inc. in New York. “I think the excess gas will shrink and that will help the gas prices rise.”
Warm weather early last week in the Northeast and mid-Atlantic states increased gas use at power plants to run air conditioners, Yuen said.
The high temperature in New York City’s Central Park on April 16 was 88 degrees Fahrenheit (31 Celsius), 26 above normal, the National Weather Service said. U.S. cooling demand was 46 percent above normal that day while demand for heat was 49 percent below normal for the week ended April 21, according to Weather Derivatives of Belton, Missouri.
A brief cold snap could lift heating demand to 4 percent above normal in the Northeast and north-central states for the seven days ending May 2 while national cooling use may be 27 percent above normal, Weather Derivatives said.
Gas has dropped 32 percent this year on a supply surplus that widened after the fourth-warmest winter on record in the U.S. curbed demand while production rose to record levels.
U.S. gas use typically slumps after the winter, which is the peak period for the heating fuel, and before heat spurs demand from power plants to run air conditioners. Power plants consumed about 31 percent of U.S. gas supplies in 2011, according to the Energy Department.
The analyst stockpile estimates ranged from gains of 40 billion to 69 billion cubic feet.
U.S. stockpiles were 58 percent above the five-year average for the week ended April 13, down from six-year high surplus of 61 percent at the end of March, department data show.
Natural gas futures last week dropped 5.4 cents, or 2.7 percent, to $1.927 per million British thermal units on the New York Mercantile Exchange, after sliding on April 19 to $1.902, the lowest intraday price since Jan. 28, 2002. Gas today rose 6.3 cents, or 3.2 percent, to $2.038 at 2:04 p.m.