DJ Natural Gas Gains Ahead of Inventory Report
By Timoth Puko and Nicole Friedman
Natural gas futures ticked higher Wednesday on a colder weather outlook and expectations that weekly inventory
data would show the biggest withdrawal from storage so far this winter.
Futures for February delivery settled up 2.7 cents, or 1.3%, at $2.118 a million British thermal units on the New
York Mercantile Exchange. The gains snapped a three-session losing streak.
Natural-gas storage levels likely fell by 185 billion cubic feet of gas during the week ended Jan. 15, according
to the average forecast of 21 analysts, brokers and traders surveyed by The Wall Street Journal. That would be the
largest withdrawal of the winter-heating season, usually the market's biggest driver for both demand and prices because
about half of U.S. homes use gas for heat.
The U.S. Energy Information Administration is due to release data for the week ended Jan. 15 on Thursday.
Prices also got support from weather, which is bringing what's likely to be some of the country's coldest
temperatures and strongest heating demand of the year, analysts said. But prices also wavered, briefly dipping into the
red before rebounding, likely because weather forecasts are unpredictable and may have a limited effect this year,
analysts said.
The natural-gas market is amply supplied due to robust production and moderate demand, as warmer-than-average
weather reduced use of natural gas as an indoor-heating fuel throughout December. Even the expected biggest withdrawal
of the year would leave U.S. inventories 17% above the five-year average for this time of year.
Cold weather is forecast in the next 10 days, but warmer temperatures are expected to return after that, according
NatGasWeather.com. "As long as the markets keep hearing of much milder conditions arriving, they're going to be
skeptical the current period of fairly strong nat gas demand will last," the firm said.
A large storm is forecast on the East Coast this weekend, but that could reduce demand by triggering power
outages, Commodity Weather Group said in a note.
Write to Timothy Puko at tim.puko@wsj.com and Nicole Friedman at nicole.friedman@wsj.com
(END) Dow Jones Newswires
January 20, 2016 16:00 ET (21:00 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
012016 21:00 -- GMT
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