Natural gas futures soared toward the end of the trading week after a smaller-than-expected supply build. Investors have been pouring into the energy commodity this week on evolving weather forecasts that key parts of North America are expected to experience a cold and snowy winter this year. It has been ten months since natural gas was above $3.
November natural gas futures surged $0.146, or 4.93%, to $3.108 per million British thermal units (Btu) at 14:42 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices are on track for a weekly gain of around 5% this week, paring their year-to-date decline to below 25%.
According to the US Energy Information Administration (EIA), domestic inventories of natural gas climbed 86 billion cubic feet for the week ending September 29, down from the previous week’s build of 90 billion cubic feet. This was also below the consensus estimate of 92 billion cubic feet.
In total, US supplies stand at 3.445 trillion cubic feet, up 357 billion cubic feet from the same time a year ago. They are also 172 billion cubic feet above the five-year average.
Natural gas prices have been rallying this week primarily on winter weather forecasts. After last winter’s mild weather, the latest projections show that many parts of the US are in for a colder and snowier season, according to AccuWeather forecasts.
Most of the wintry weather will be situated in the northeast. The central and southeast locations will be a tossup, industry experts warn.
“In the United States, our AccuWeather long-range forecast prediction is for it to be colder this winter than it was last year, with temperatures closer to normal,” AccuWeather Founder & Executive Chairman Dr. Joel N. Myers said. “We expect to see an increase in U.S. demand for heating overall compared to last year, even though many places in the North will still average below historical demand.”
In other energy commodities, November West Texas Intermediate (WTI) crude oil futures fell $0.16, or 0.19%, to $84.06 per barrel. December Brent crude futures tumbled $0.31, or 0.37%, to $85.48 a barrel. November gasoline futures were flat at $2.2007 per gallon. November heating oil futures declined $0.0957, or 3.17%, to $2.9221 a gallon.