Natural gas inventories ended March with a record decline as a cold snap boosted demand for the heating fuel, analyst forecasts compiled by Bloomberg show.
Stockpiles fell 92 billion cubic feet to 1.69 trillion in the seven days ended March 29, based on the median of 18 estimates. That would be the largest drop on record for the time of year, according to data from the Energy Information Administration. The five-year average stockpile change for the period is an increase of 4 billion. Last year, supplies rose by 43 billion during that week.
Stockpile estimates ranged from decreases of 79 billion to 100 billion cubic feet. The EIA’s weekly supply report is scheduled for release at 10:30 a.m. tomorrow in Washington.
Temperatures were below normal in the eastern two-thirds of the contiguous 48 states last week, according to MDA Weather Services in Gaithersburg, Maryland. Gas futures jumped to an intraday high of $4.121 per million British thermal units on March 28, the most since September 2011, as a year-over-year supply deficit widened to a record 27 percent.
“Prices may still have another leg higher in them,” John Kilduff, a partner at Again Capital LLC and editor of the Energy OverView newsletter in New York, wrote today. “We had projected that prices would top out above $4.20, but the fierce rejection of $4.12 calls that view into question. The inventory report tomorrow will be critical to whether or not to bail on that call.”
Natural gas futures this week have fallen 12.4 cents, or 3.1 percent, to $3.90 per million British thermal units on the New York Mercantile Exchange, heading for the first weekly decline since Feb. 15. Prices are up 16 percent this year.