Gas Futures Reach Highest in Two Weeks After Low Storage Gains

  • Supplies rose 52 billion cubic feet; forecast was 57 billion
  • Storage levels are now tied with previous all-time high

Natural gas futures climbed to the highest level in two weeks after a government report showed a smaller-than-forecast gain in U.S. inventories. The supply total tied a three-year record.

Inventories increased 52 billion cubic feet in the week ended Oct. 30 to 3.929 trillion, the Energy Information Administration said. Analyst estimates compiled by Bloomberg and a survey of Bloomberg users had predicted an injection of 57 billion. The total tied the previous all-time high set on Nov. 2, 2012.

“As you start to fill up storage, it becomes harder to inject gas because you start to run out of room,” Kent Bayazitoglu, an analyst at Gelber & Associates in Houston. “That gives the market a little bit of a boost.”

Natural gas for December delivery rose 10.2 cents, or 4.5 percent, to settle at $2.364 per million British thermal units on the New York Mercantile Exchange, the highest since Oct. 22. Gas traded at $2.312 before the storage number was released at 10:30 a.m. in Washington.

The stockpile increase was smaller than the five-year average gain for the week of 58 billion cubic feet, according to the EIA. A surplus to the five-year average narrowed to 3.9 percent from 4.1 percent the previous week. Supplies were 10.4 percent above year-earlier inventories, compared with 11.8 percent in last week’s report.

The weather will probably be warmer than usual for the eastern half of the U.S. through Nov. 19, according to MDA Weather Services. That could curb demand for the winter heating fuel. Philadelphia will probably have a low of 52 degrees Fahrenheit (11 Celsius) on Nov. 11, or 11 above normal, AccuWeather data show.

Gas deliveries to customers, which include power plants, residential and industrial users, jumped 15 percent to 69.1 billion cubic feet on Wednesday from a week earlier, LCI Energy Insight data show.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE