- Central U.S. may see below-normal temperatures as warmth fades
- Gas inventories rose by less than average for third week
Forecasts showing a return to cool weather after a warm spell in the eastern U.S. led natural gas futures to a second straight weekly gain.
A midday update to the government’s Global Forecast System weather model predicted below-normal temperatures in the Midwest and mid-Atlantic from Nov. 16 through Nov. 20, according to MDA Weather Services. Gas inventories climbed by less than average for a third straight week, the Energy Information Administration said Thursday.
“The market is going to have a tough time moving lower with winter only a few weeks away,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “Traders were looking for the storage number to come in below normal, and it did. The market has been finding some support at these prices levels.”
Natural gas for December delivery rose 0.7 cent to $2.371 per million British thermal units on the New York Mercantile Exchange, the highest settlement since Oct. 22. Prices rose 2.2 percent this week following an 8 percent slide in October that was the biggest monthly decline this year.
Gas stockpiles rose by 52 billion cubic feet in the week ended Oct. 30, falling short of the five-year average gain of 58 billion for the period, the Energy Information Administration said Thursday. Supplies totaled 3.929 trillion, matching the all-time high.
Natural gas production from the seven largest shale reservoirs in the U.S. may slip 0.7 percent to 44.882 billion cubic feet a day in November, the EIA said Oct. 13 in its monthly Drilling Productivity report.
Output from the Marcellus formation, the biggest shale basin by volume, may decline 1.3 percent to 15.892 billion cubic feet a day in November, falling for a fifth straight month to the lowest since January, according to the EIA.
Gas demand from power plants may surge 16 percent this year to 25.8 billion cubic feet a day as generators take advantage of low prices, the EIA said Oct. 6 in its monthly Short-Term Energy Outlook. Consumption by electric generators is up 27 percent from a year ago Friday, according to LCI Energy Insight in El Paso, Texas.