DJ Natural Gas Turns Positive After Inventory Data
By Nicole Friedman
NEW YORK--Natural gas prices erased losses to trade higher Thursday on a larger-than-expected storage withdrawal.
Natural-gas inventories fell by 211 billion cubic feet in the week ended Jan. 22, the U.S. Energy Information
Administration said Thursday, more than the 205-bcf draw that analysts surveyed by The Wall Street Journal had
expected.
The large weekly withdrawal helped shrink the oversupply of the fuel. Stockpiles now stand 16% above the five-year
average for the week, down from a 17% surplus as of last week.
Natural gas futures for March delivery recently rose 0.6 cent, or 0.3%, to $2.163 a million British thermal units on
the New York Mercantile Exchange, up from as low as $2.088/mmBtu prior to the inventory data.
However, analysts said that one large withdrawal is not sufficient to clear the glut of natural gas.
"This was a one-time deal," said Kyle Cooper, analyst at IAF Advisors in Houston. "Unfortunately the weather forecast
really turned bearish this morning. ... I think that's why the response [to the inventory data] is a bit muted."
Weather forecasts for the next two weeks show warmer temperatures than previously expected, according to Commodity
Weather Group LLC. Warm weather can reduce demand for natural gas as an indoor-heating fuel.
The inventory data "may not fully offset the forecast for milder temperatures going forward," said Tim Evans, analyst
at Citigroup Inc., in a note. "Failure to rally would underscore the downside vulnerability, with traders concluding
that winter is effectively over."
Write to Nicole Friedman at
nicole.friedman@wsj.com
(END) Dow Jones Newswires
January 28, 2016 11:46 ET (16:46 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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