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Natural gas futures snapped two days of declines on Monday, as weather forecasting models called for below-normal temperatures across many densely populated US areas, stoking demand for the power-station fuel.

On the New York Mercantile Exchange, natural gas for delivery in April traded at $4.316 per million British thermal units at 10:04 GMT, up 0.43% on the day. Prices held in a daily range between $4.340 and $4.312 per mBtu. However, the contract registered a second weekly decline and settled last 5-day period 2.4% lower, after losing 4.4% in the previous week.

US weather outlook

A fresh cold outbreak has swept across the highest-consumption states of the northern US and will remain in place over the next few days, NatGasWeather.com reported on March 24.

Unseasonably strong natural gas and heating demand can be expected, as the cold front will lead to temperature anomalies of 15-30 °F colder-than-normal across many US regions. The Great Lakes and Northeast will experience moderate snowfall Tuesday into Wednesday, followed by a quick warm surge, which will push deep into the eastern US, Friday into Saturday. However, a couple of days of below-normal temperatures will close out the month.

EIA’s weekly US gas storage report

The Energy Information Administration reported on Thursday that US natural gas inventories fell by 48 billion cubic feet in the seven days through March 14th, less than analysts’ median forecast of a 58 billion cubic feet drop and compared to a withdrawal of 74 billion cubic feet the same week a year ago. However, the decline exceeded the five-year average drop of 30 bcf during the comparable period.

Total gas held in US underground storage hubs fell to a 10-year seasonal low of 953 billion cubic feet. US gas stockpiles were 49.4% below last year’s amount of 1.885 trillion cubic feet during the comparable week. The deficit to the five-year average widened to a record 47.9%, up from 46.2% a week earlier.

Inventories at the East Region received a net withdrawal of 35 bcf and fell to 395 bcf, 50.3% below the five-year average of 794 billion cubic feet. Stockpiles in the West Region fell by 2 bcf to 167 bcf and were 43% beneath the average. Inventories at the Producing Region slid by 11 bcf. At 391 bcf, they were 47.3% below the five-year average amount of 742 billion cubic feet.

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