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Natural Gas Futures Inch Lower As Focus Shifts To Storage Data

Natural Gas Futures Inch Lower As Focus Shifts To Storage Data

Investing.com - Natural gas futures inched lower on Wednesday, as investors looked ahead to weekly data from the U.S. on supplies in storage to gauge demand for the fuel.

Front-month U.S. natural gas futures dipped 1.5 cents, or around 0.6%, to $2.663 per million British thermal units (btu) by 10:50AM ET (1450GMT).

The commodity tacked on 0.9% on Tuesday, boosted by forecasts for a bump in late-winter heating demand.

However, market experts warned that futures are likely to remain vulnerable in the near-term as the coldest part of the winter has effectively passed.

Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Meanwhile, market participants looked ahead to this week's storage data due on Thursday, which is expected to show a draw in a range between 86 and 96 billion cubic feet (bcf) in the week ended March 16.

That compares with a decline of 93 bcf in the preceding week, a fall of 150 bcf a year earlier and a five-year average drop of 53 bcf.

Total natural gas in storage currently stands at 1.532 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.

That figure is 718 bcf, or around 31.9%, lower than levels at this time a year ago, and 296 bcf, or roughly 16.1%, below the five-year average for this time of year.

Despite stocks being well below their seasonal averages for this time of year, record high production levels are expected to keep a lid on prices.

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