A recent cold snap in the United States has led to an increase in demand for natural gas, resulting in a probable decrease in inventories for the previous week. However, experts anticipate that the boost in demand may be short-lived due to forecasts predicting a mild first half of December.
According to a survey conducted by The Wall Street Journal, analysts, brokers, and traders expect the Energy Information Administration (EIA) to report a decline of 110 billion cubic feet in underground natural gas storage, bringing the total to 3,726 billion cubic feet as of December 1.
All 11 analysts surveyed predicted a draw, with estimates ranging from a reduction of 99 billion cubic feet to 127 billion cubic feet. The EIA will release its official report on Thursday at 10:30am EST.
This anticipated draw comes after a surprising injection of 10 billion cubic feet the previous week. As of November 24, natural gas inventories in the lower 48 states amounted to 3,836 billion cubic feet, which is 8.6% higher than the five-year average for that week, as reported by the EIA.
However, experts from Ritterbusch and Associates caution that an unusually large withdrawal from storage is unlikely to have a significant impact on prices. They believe that the estimated reduction of approximately 40 billion cubic feet in the surplus could easily be offset by favorable weather outlooks for the rest of the month.
In response to these market dynamics, natural gas prices for January delivery initially rose slightly on Wednesday but then experienced a sharp decline. By the end of the day, prices had dropped 12 cents or 4.6% to $2.586 dollars per million British thermal units.
Our Latest News
Centaur Media Expects Lower Revenue for Full-Year 2023
Centaur Media expects lower revenue for full-year 2023 due to challenging environment, but surpasses profit margin target through operational improvements.
U.K. Stocks Slide as FTSE 100 Closes Down
U.K. stocks declined, with FTSE 100 closing down 0.16%. Currency and commodity performance also analyzed.
Magic Software Enterprises Faces Third-Quarter Revenue Shortfall
Magic Software Enterprises faces a significant revenue shortfall in the third quarter due to unexpected cancellations from important blue-chip customers. The co...