DJ Natural Gas Pares Gains on Smaller-Than-Expected Stockpile Increase
By Christian Berthelsen
Natural-gas futures pulled back but remained in the black Thursday after the
release of weekly U.S. government inventory data came in slightly below
expectations.
The U.S. Energy Information Administration said gas stockpiles rose by 82
billion cubic feet in the week ended Aug. 1, slightly lower than the 84 bcf
forecast of analysts surveyed by The Wall Street Journal.
Natural gas for September delivery was up 0.4 cent, or 0.1%, at $3.9370 a
million British thermal units on the New York Mercantile Exchange. Prices had
been up more than four cents prior to the release of the data.
The addition to storage "was somewhat below the consensus expectation,
helping to sustain what has been improving market sentiment," Citigroup Inc.
analyst Tim Evans said in a note.
The natural-gas market has been on something of a tear lately, rising more
than 4% over the past two weeks. A mild summer has kept demand low for
natural-gas-fired electricity to power air conditioning, but new forecasts for
the coming weeks show warm temperatures creeping up in the South and a possible
warm and humid trend for the East Coast that could increase demand. Meanwhile,
analysts say a drop in prices before the recent rally prompted some coal-fired
utilities to switch over to natural gas.
Though the addition to supplies was 67% more than the average of 49 bcf for
this time of year, analysts have said the rate of growth in stored inventories
is slowing down, raising bullish expectations that supplies could be tight at
the start of the heating season in the fall. Thursday's reported increase in
supplies was the smallest in three months.
Inventories stood at 2.389 trillion cubic feet as of Aug. 1, 20% below
average for this time of year, as the U.S. strains to rebuild supplies depleted
by heating demand during the last winter. Robust production has helped rebuild
supplies, and many analysts believe adequate inventories will be reached by
autumn.
"While the market seems to be stabilizing, it's just catching its breath,"
said Gene McGillian, an analyst at wholesale brokerage Tradition Energy.
"There's more pressure in front of us."
Write to Christian Berthelsen at christian.berthelsen@wsj.com
Subscribe to WSJ: <a href="http://online.wsj.com?mod=djnwires">http://online.wsj.com?mod=djnwires</a>
(END) Dow Jones Newswires
August 07, 2014 11:19 ET (15:19 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.
080714 15:19 -- GMT
No comments:
Post a Comment