Post report media spinFunny how yesterday we were rising because of end of January cold now we are falling on end of Jan warm. lol
Natural Gas Falls as U.S. Inventories Drop Less Than Expected
January 13, 2011, 11:10 AM ESTBy Christine Buurma
Jan. 13 (Bloomberg) -- Natural gas futures declined for the first time in three days after a government report showed that U.S. stockpiles fell less than forecast last week.
Gas inventories dropped 138 billion cubic feet in the week ended Jan. 7 to 2.959 trillion cubic feet, the Energy Department said today. Analyst estimates compiled by Bloomberg showed a decline of 146 billion. A separate survey of Bloomberg users showed a decrease of 147 billion.
“The storage number was somewhat below consensus this week,” said Jason Schenker, the president of Prestige Economics, an energy advisory firm in Austin, Texas. “The market is well supplied and as we look into 2011 and 2012, you’re going to see a lot of gas flood the market even with an increase in demand.”
Natural gas for February delivery fell 12.3 cents, or 2.7 percent, to $4.408 per million British thermal units at 10:57 a.m. on the New York Mercantile Exchange. Gas traded at $4.488 before the storage report was released at 10:30 a.m. in Washington. The futures have declined 23 percent from a year ago.
The stockpile decrease was bigger than the five-year average withdrawal for the week of 109 billion cubic feet, department data show. A surplus to the five-year average fell to 5.8 percent from 6.5 percent the previous week. A 1.5 percent deficit to year-earlier supplies was erased, leaving a surplus of 2.4 percent.
Gas inventories may total 1.774 trillion cubic feet by the end of March, up from 1.662 trillion a year earlier and the highest level ever for the end of the heating season, the department said Jan. 11 in its Short-Term Energy Outlook. Robust production and mild weather is driving the increase in stockpiles, the department said.
Weather Outlook
Temperatures may be normal or above-normal in the Midwest from Jan. 23 through Jan. 27, according to Commodity Weather Group in Bethesda, Maryland. Earlier forecasts had shown colder- than-normal weather in the region during that period.
“General agreement continues that we are heading toward a milder North American pattern by the end of January,” Commodity Weather Group meteorologists led by Matt Rogers said in a note to clients today.
The low temperature in Indianapolis on Jan. 25 may be 19 degrees Fahrenheit (minus 7 Celsius), 1 degree above normal, according to AccuWeather Inc. in State College, Pennsylvania. The low in Columbus, Ohio, may be 25 degrees, 5 degrees above normal.
U.S. heating demand may be 8 percent below normal from Jan. 19 through Jan. 23, according to Weather Derivatives in Belton, Missouri.
About 52 percent of U.S. households use natural gas for heating, according to the Energy Department.
Total U.S. marketed gas production in October was 1.945 trillion cubic feet, the highest level since 1973, according to the Energy Department.
--Editors: Bill Banker, Charlotte Porter
To contact the reporters on this story: Christine Buurma in New York at cbuurma1@bloomberg.net;
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net