The NYMEX March natural gas futures contract settled 8 cents higher at $3.130/MMBtu on Tuesday, on the heels of a slide that saw the prompt month shed nearly 13 cents across two trading days.
The March contract had given up a combined 13.7 cents in trading Friday and Monday following the US Energy Information Administration's bearish storage report released Thursday.
US natural gas in storage fell 87 Bcf to 2.711 Tcf in the week ended January 27, according to the EIA, the smallest withdrawal for January since an 86-Bcf draw for the week ended January 22, 2010.
"We continue to anticipate smaller-than-average storage withdrawals over the next few weeks," Tim Evans of Citi Futures said in a note.
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"Thursday's storage report for the week ended February 3 may interrupt the larger bearish trend, with the early consensus running similar to our own forecast for 160 Bcf in net withdrawals, exceeding the relatively modest 138 Bcf five-year average for the date," Evans said.
Platts Analytics' Bentek Energy projects total US demand to average around 88.5 Bcf/d over the next two weeks, up about 7 Bcf/d from Tuesday. Production continues to struggle to gain traction and is expected to stay flat at about 76 Bcf/d over the same period.
The National Weather Service's eight- to 14-day outlook lends additional support to Platts Analytics' demand uptick expectation, with an increasingly high probability for temperatures in New England to be below normal, while the rest of the country is forecast to be slightly above average. This marks a slight cooling down from the six- to 10-day forecast which has the entire country well above normal.
The contract traded in a range of $3.051/MMBtu and $3.156/MMBtu.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2400 GMT).
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