FromMarketWatch:
Natural-gas futures on Thursday pared gains after the U.S. Energy Information Administration reported
that supplies of natural gas fell 74 billion cubic feet for the week
ended March 28. The decline came in on the low end of market
expectations as analysts surveyed by Platts forecast a fall of between
73 billion cubic feet and 77 billion cubic feet. Total stocks now stand
at 822 billion cubic feet, down 878 billion cubic feet from a year ago
and 992 billion cubic feet below the five-year average, the government
said. May natural gas
NGK14
+1.79%
was at $4.38 per million British thermal units, up 2 cents, or 0.3%. It was trading at $4.40 before the data....MORE
And from their DJ confreres at MoneyBeat:
Natural-gas prices are too low and put the U.S. at risk of not having enough gas in storage next winter and even beyond, say Citigroup analysts in a note published today.
Supplies are at 11-year lows, after a tough winter fueled demand for
gas-powered indoor heating and ate away at a majority of the nation’s
stored gas.
Many analysts and traders argue that booming production levels, which
are projected to hit another record high this year, will allow
stockpiles to replenish.
Citigroup has argued against this theory for months. A group of
Citigroup analysts, led by energy strategist Anthony Yuen, published a
note Thursday stating that production growth is likely to be less
vigorous than current prices reflect.
“The market seems to think future supply should be robust, summer
could be mild and winter would unlikely be cold,” the analysts write.
Production will likely expand by 3 billion cubic feet per day
compared to last year, the bank says, but that will leave inventories
with just 3.45 trillion cubic feet of gas in storage by the end of
October. In comparison, the five-year average for the final week of
October is 3.848 tcf. Lower-than-expected production growth could even
reduce supply levels through 2015, the bank says....MORE
The futures reaction to the
EIA storage report was initially down but are now at $4.440 up 7.6 cents:
