Gas Supply Gain Was Below Average on Hot Weather, Analysts Say
U.S. natural-gas supplies probably climbed by less than the seasonal average last week as above- normal temperatures increased demand from power plants, according to analyst forecasts compiled by Bloomberg.
Inventories gained 64 billion cubic feet, or 2.2 percent, to 3.008 trillion cubic feet in the week ended June 15, based on the median of 23 estimates. The five-year average stockpile change for the week is an increase of 87 billion, according to Energy Department data. Supplies climbed 90 billion cubic feet a year earlier.
The weather was hotter than normal in the central U.S. and Great Lakes region last week, according to Commodity Weather Group LLC in Bethesda, Maryland. Cooling demand in the northern central U.S. was 52 percent above normal, data from Weather Derivatives in Belton, Missouri, show.
“Warmer than average temperatures continue to be the price bull’s best friend in the current market,” Martin King, an analyst at FirstEnergy Capital Corp. in Calgary, said in a note to clients yesterday. “Increasing overall power generation from gas-fired units” has kept the market undersupplied, King said.
Cooling degree days are a measure of weather-related demand for electricity. Power producers account for about 36 percent of U.S. gas consumption, according to the Energy Department.
The stockpile estimates ranged from increases of 59 billion to 68 billion cubic feet. The Energy Department’s weekly supply report is scheduled for release at 10:30 a.m. tomorrow in Washington.
Natural gas for July delivery gained 16.8 cents, or 7.3 percent, to $2.467 per million British thermal units last week on the New York Mercantile Exchange. Prices today slid 2.8 cents, or 1.1 percent, to settle at $2.517.
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