Winter's Ending Earlier Than Ever for U.S. Natural Gas MarketBy
Estimates show smallest February inventory drop on record
Record high temperatures seen from Boston to Milwaukee
Winter is ending earlier than ever for America’s natural gas market as record warmth leaves a glut of the fuel in storage.
U.S. natural gas stockpiles probably fell by 2 billion cubic feet in the seven days ended Feb. 24, the smallest amount of any February week in data going back to 1994, based on estimates compiled by Bloomberg. While this supply decline may not be last of the season, the early thaw means the peak of heating demand for gas has already passed, according to Mizuho Securities USA Inc.
Record temperatures from Boston to Milwaukee have decimated gas demand for heating, leaving supplies above normal for this time of year and sending prices to an eight-month low. While rising gas exports to Mexico and overseas buyers have helped boost consumption of the heating fuel, the inventory surplus to normal supplies is poised to expand as spring approaches.
“The weather in the East is basically bringing winter to an early end,” said Bob Yawger, director of the futures division at Mizuho in New York. “There are too many headwinds for gas prices to recover much from here.”
In addition to Boston and Milwaukee, Columbus, Ohio, and Binghamton, New York, also set new all-time high temperatures for February, Tom Di Liberto, a meteorologist at the Climate Prediction Center in College Park, Maryland, wrote in a blog post Tuesday. The cities had readings in the 70s Fahrenheit (20s Celsius.)
Gas inventories totaled 2.356 trillion cubic feet as of Feb. 17, 7.1 percent above the five-year average for the period. The Energy Information Administration’s weekly storage report is due at 10:30 a.m. Thursday in Washington.
— With assistance by Kevin Varley, and Brian K Sullivan