Natural gas recovered the better half of its losses on Tuesday after the energy source dropped yesterday to its lowest in more than two years.
Natural gas for delivery in February traded 3.33% higher at $2.888 per million British thermal units at 11:22 GMT, having shifted in a daily range of $2.911-$2.795. The energy source plummeted 5.13% on Monday to $2.795, but not before it reached its lowest since September 20th 2012 at $2.783.
According to NatGasWeather.com, US natural gas demand will be high-to-moderate compared to normal through January 19th, with a slightly warmer trend early next week, turning neutral towards the end of it.
Colder Canadian air will maintain its position over the Great Lakes and interior Northeast during the next two to three days, while temperatures in the southern US will push higher and reach 50s and 60s.
A weather system will move across the Southwest pouring down snow and rain over certain areas before it flows into northern Texas and the Plains on Wednesday. The system will bring milder temperatures over the regions and will also clear the way for a strong Pacific flow expected later this week.
A series of weather systems will travel across the country and each of them is expected to warm up temperatures before it arrives and leaves behind a quick blast of colder readings.
A stronger weather system will flow into the northern US, bringing areas of snow and rain on Sunday and Monday, NatGasWeather.com estimated.
Overall temperatures will go above the usual over the majority of the US as the severe cold Canadian air will be pushed out of the US late this week. The higher readings are expected to last until late next week as weather systems travel the length of the country with areas of rain and snow.
Colder Canadian systems are projected to flow into parts of the northern US around 23-24th. However, sub-freezing readings are not expected to reach very far south, leaving the central and southern US quite mild.
Temperatures
According to AccuWeather.com, temperatures in New York tomorrow will range between 22 and 31 degrees Fahrenheit, below the average of 27-38, before increasing to as much as 45 degrees on January 18th. Chicago will range between 2 and 13 degrees today, 18 beneath normal, and temperatures are poised to remain colder than usual until Friday, when readings will hit seasonal levels.
Down South, Houston will see the mercury range between 39 and 50 degrees today, compared to the average of 45-63, before temperatures climb to seasonal levels on January 17th. On the West Coast, Los Angeles will range between 50 and 74 degrees tomorrow, compared to the usual 48-68, with readings projected to stay slightly above normal through January 21st.
Supplies
The Energy Information Administration reported on Thursday that US natural gas inventories slid by 131 billion cubic feet (bcf) during the week ended January 8th, compared to analysts’ projections for a drop of 121 bcf. Supplies declined by 191 billion cubic feet during the same week a year earlier.
Total gas held in US storage hubs amounted to 3.089 trillion cubic feet, narrowing the deficit to the five-year average of 3.156 trillion to 2.1% from 2.5% during the previous week. Stockpiles stood at 2.839 trillion cubic feet a year ago, 8.8% below current levels.
Pivot Points
According to Binary Tribune’s daily analysis, February natural gas futures’ central pivot point stands at $2.837. In case the contract penetrates the first resistance level at $2.892 per million British thermal units, it will encounter next resistance at $2.988. If breached, upside movement may attempt to advance to $3.043 per mBtu.
If the energy source drops below its first support level at $2.741 per mBtu, it will next see support at $2.686. If the second key support zone is breached, the power-station fuel’s downward movement may extend to $2.590 per mBtu.
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