Storage Data Rallies Natural Gashttps://online.wsj.com/article/SB10001424052702303960604575157770904221914.html?mod=WSJ_latestheadlines
- APRIL 1, 2010, 11:19 A.M. ET
Storage Data Rallies Natural Gas
HOUSTON—Natural-gas futures shot morethan 5% higher after a U.S. government report showed natural gasinventories grew by a slightly smaller-than-expected amount last week.
Natural gas for May delivery on the New York Mercantile Exchange wasrecently trading 16.7 cents, or 4.32%, higher at $4.036 a millionBritish thermal units. The front-month contract rose as high as$4.114/MMBtu after the U.S. Energy Information Administration reportedthat natural gas inventories grew by 12 billion cubic feet last week.Analysts and traders had expected a 14 bcf build, according to theaverage of estimates in a Dow Jones Newswires survey.
"Given the fact that we have had so much selling, the bullish newsgave the market a jump," says Kent Bayazitoglu, an analyst withHouston-based Gelber & Associates. Natural gas prices have lostabout a third of their value since hitting highs in January above$6/MMBtu.
Natural gas in U.S. storage for the week ended March 26 stands at1.638 trillion cubic feet—1% lower than a year ago and 10.8% higher thanthe five year average.
On average, 27 bcf were withdrawn from storage during the same weekover the past five years.
"This still would seem to reinforce the dominant bearish sentiment,especially given the likelihood of further bearish reports off the mildtemperatures in northern heating markets we're seeing," Tim Evans, ananalyst with Citi Futures Perspective, wrote in a note to clients.
Meteorologists with the private forecasting firm MDA EarthSat Weatherare predicting above-normal temperatures across the eastern half of thecountry from April 6 to April 10.
Mild weather can stifle gas demand and the market has now entered itsso-called shoulder season—when mild weather tempers heating demand, andgas demand to generate electricity for air conditioners has not yetpicked up.
Write to JasonWomack at jason.womack@dowjones.com