Natural gas fell for a third day amid speculations that mild weather across most of the US through the end of April will help replenish the nations gas inventories, which were drained to an 11-year low by this years harsh winter weather.
On the New York Mercantile Exchange, natural gas futures for settlement in May slid by 0.64% to $4.531 per million British thermal units by 09:28 GMT. Prices shifted in a daily range between $4.582 and $4.520 per mBtu. The energy source fell for a second day on Monday and lost 1.3%, settling at 4.56 per mBtu.
Natural gas dropped amid forecasts for overall seasonal weather across most of the US through the end of April. According to MDA Weather Services, readings in most of the 48 lower states will be normal or above-normal through April 28th.
NatGasWeather.com reported that currently colder-than-average temperatures have set up across the central and eastern US and that lows in the range of between 20 and 30 degrees Fahrenheit in the mornings will heighten natural gas demand. However, conditions are expected to moderate on Wednesday and Thursday, while a following cold blast will be less impressive and mainly impact the Midwest and Northeast.
Around 49% of US households use natural gas for heating, while power plants account for 31% of gas consumption.
The website also reported that there will be a decent warm up next week, which may be followed by another cool wave. Overall, NatGasWeather.com predicts that very active weather will continue through the rest of April for the eastern and central states and warm conditions will give way to a cool blast at the end of the month.
According to AccuWeather.com, the low in New York on April 18th will be 8 degrees Celsius, the same as the average, while readings in Texas will bottom at 19 degrees, 1 above usual. Temperatures in Chicago will dip to -1 degree on April 18th before reaching a high of 23 degrees on April 23rd, 6 above normal.
Market players also eyed the upcoming government statistics, due at 14:30 GMT on Thursday. The Energy Information Administration reported last Thursday that US natural gas inventories rose by 4 billion cubic feet in the seven days through April 4, compared to analysts’ expectations for a gain of 15 billion cubic feet. The five-year average is an increase of 9 billion cubic feet.
Total gas held in US underground storage hubs fell to an 11-year seasonal low of 826 billion cubic feet. US gas stockpiles were 50.7% below last year’s amount of 1.675 trillion cubic feet during the comparable week. The deficit to the five-year average remained unchanged at a record 54.7%.
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