Natural-gas futures rose 1% on Wednesday on expectations that cold
weather has cut supplies and trimmed fears about bloated stockpiles of
the home-heating fuel.
Traders are betting on natural-gas prices to rise ahead of a
weekly inventory report on Thursday, which is expected to show a larger
natural-gas withdrawal than the previous week's 127 billion cubic feet.
The U.S. Energy Information Administration releases the data at 10:30
a.m. EST Thursday.
Phil Flynn, energy analyst at Price Futures Group, said he
anticipates a 160 bcf withdrawal, which is well above the five-year
average withdrawal of about 118 bcf.
"We've had a big spike up in gas prices, but people are
reluctant to sell into it because we should see a good draw in
tomorrow's inventory data," Mr. Flynn said Wednesday.
He added, "It was very cold last week, and demand should be pretty good."
Natural gas for April delivery rose three cents, or 0.9%, to
recently trade at $3.486 a million British thermal units on the New York
Mercantile Exchange.
Forecasts for colder weather are also helping natural-gas
prices. Private weather forecaster Commodity Weather Group predicts cold
weather will sweep over the next 11 to 15 days into the Midwest, a
region that depends heavily on natural gas for home heating. When
temperatures fall in the winter, gas demand typically rises, giving a
boost to prices.
Weather-inspired gains lifted gas prices to a one-month high
on Tuesday, as March-delivery natural-gas futures expired. Gas prices
have climbed more than 8% over the past two weeks on forecasts for
colder-than-normal weather.
Natural gas for next-day delivery at the benchmark Henry Hub
in Louisiana recently traded at $3.525/MMBtu, according to
IntercontinentalExchange, compared with Tuesday's average of
$3.4585/MMBtu. Natural gas for next-day delivery at Transcontinental
Zone 6 in New York traded at $3.82/MMBtu, up from $3.7838/MMBtu.