WSJ: US GAS: Futures Drop Ahead of Weekly Inventory Data
--Gas futures lower as analysts weigh milder temperatures
--U.S. inventories data due 10:30 a.m. EDT Thursday
--Inventories seen rising by 57-bcf
By Jerry A. DiColo
NEW YORK--Natural-gas futures fell Thursday ahead of weekly data expected to show a smaller-than-average increase in natural-gas storage, as traders keep watch on signs of milder weather.
Natural gas for July delivery fell 2.7 cents, or 1.1%, to recently trade at $2.394 a million British thermal units on the New York Mercantile Exchange.
After pushing to nearly $2.50/MMBtu earlier this week, gas prices retreated on concerns that temperatures will be milder that earlier forecasts predicted, reducing the use of air conditioning and leading to drops in gas-fired electricity demand.
MDA EarthSat, a forecaster, on Thursday pointed to a "weak cool shot" over then next six-to-ten days that could interrupt a period of warmer-than-normal temperatures across much of the U.S.
"The temperatures are looking milder, so I think that's why we're easing back a bit," said Tom Saal, a broker at INTL Hencorp Futures.
Temperatures over the next week aren't likely to push prices above the $2.50 level, according to Jim Ritterbusch, head of trading advisor Ritterbusch and Associates. Higher prices in the near term, he said, "will likely require major assistance from today's storage data."
U.S. natural-gas stockpiles are expected to rise by 57 billion cubic feet to 2.872 trillion cubic feet in data from the Energy Information Administration, according to a survey of analysts and traders.
If correct, the injection would continue a pattern of smaller-than-average increases to storage over the past month, and put stockpiles 31% higher than the five-year average for this time of year. Last week, the surplus was 35% higher than the five-year average.
The data is expected to be released at 10:30 a.m. EDT Thursday.
"The pattern this season is the numbers have come in significantly lower than injection averages. But the market has already built that into the price," Mr. Saal added.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $2.34/MMBtu, according to IntercontinentalExchange, compared with Wednesday's average of $2.4081/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $2.48/MMBtu, down from $2.5410/MMBtu.
Write to Jerry A. DiColo at jerry.dicolo@dowjones.com
