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Natural Gas Lower After Inventory Data
Stockpiles fell last week but remain near record highs
By NICOLE FRIEDMAN
Updated Dec. 3, 2015 11:09 a.m. ET
http://www.wsj.com/articles/natural-gas-falls-ahead-of-inventory-data-1449156626
NEW YORK--Natural gas prices rose Thursday, then erased gains, after weekly inventory data showed that stockpiles fell more than expected last week but held near record highs.

Natural gas inventories fell for the first time since March in the week ended Nov. 27, the U.S. Energy Information Administration said Thursday. Stockpiles drew by 53 billion cubic feet, more than the 51 bcf decline that analysts and traders surveyed by The Wall Street Journal had expected.

Futures for January delivery rose as high as $2.19 a million British thermal units on the New York Mercantile Exchange after the report, before erasing gains. Prices recently fell 1.3 cent, or 0.6%, to $2.152 a million British thermal units on the New York Mercantile Exchange.

Consumers usually start taking natural gas out of storage in late October or early November as demand for the heating fuel increases. But mild weather has kept consumption low in recent weeks, pushing inventories to record highs above 4 trillion cubic feet.

The market remains oversupplied. As of Nov. 27, stockpiles stood at 3.956 tcf, 6.7% above the five-year average for this time of year.

“Even with the draw today, you’re basically just under 4 tcf, and we’re in December now. So there’s a lot of gas around,” said Gene McGillian, analyst at Tradition Energy. “It doesn’t look like we have winter starting up.”

Warmer-than-average temperatures in the next two weeks are expected to keep consumption subdued, meaning that stockpile draws in the coming weeks could be smaller than average, analysts say.

Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.11/mmBtu, compared with Wednesday’s range of $2.1325-$2.21. Cash prices at the Transco Z6 hub in New York last traded at $2.10/mmBtu, compared with Wednesday’s range of $2.14-$2.22.

Write to Nicole Friedman at [e-mail]