FOX: U.S. GAS: Futures Aim at 2012 High Ahead of Inventory Data
Natural gas futures pushed towards the highest price since December Thursday ahead of weekly government data on U.S. gas stockpiles.
Natural gas for November delivery rose 4.2 cents, or 1.3%, to recently trade at $3.257 a million British thermal units on the New York Mercantile Exchange, above the 2012 settlement high of $3.214/MMBtu hit in July.
The gains come as November futures become the front-month contract, after October's expiration Wednesday. The November contract traded at a sharp 19 cent premium when the October contract expired.
"Because November is considered the first winter month, it's probably due a little bit of a premium," said Tom Saal, a broker at INTL Hencorp Futures. "The question is how much?"
Natural gas prices have again moved above the key $3/MMBtu level after falling to decade lows below $2 in April.
Throughout the summer, hotter-than-average temperatures resulted in higher fuel usage from gas-fired utilities, which put a dent in the massive natural-gas surplus left over after a mild winter.
September and October are considered the "shoulder season" in the natural-gas market, the period when gas usage falls as homes and businesses shut off air conditioning but don't yet need to turn on gas-fired heating. As temperatures fall into November, natural gas demand typically rises, leading to withdrawals from U.S. stockpiles.
Meanwhile, traders are positioning before the 10:30 a.m. EDT release of inventory data from the U.S. Energy Information Administration.
Analysts and traders expect natural gas stockpiles rose by 76 billion cubic feet in the week ended Sept. 21, according to a Dow Jones Newswires survey. The storage estimate is below last year's 104-bcf increase for the same week, and in line with the 76-bcf rise for the same period.
If the storage estimate is correct, inventories as of Sept. 21 will total 3.572 trillion cubic feet, 9% above a year ago and 8% above the five-year average for this time of year.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.035/MMBtu, according to IntercontinentalExchange, compared with Wednesday's average of $2.9156/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $3.1050/MMBtu, up from $3.0691/MMBtu.
Write to Jerry A. DiColo at jerry.dicolo@dowjones.com
