WSJ: Natural-Gas Futures Steady Awaiting Inventory Data
--Rally stalls after 2.4% rise Tuesday
--Lingering Midwest heat factored into prices
--Market awaits Thursday gas storage data
By David Bird
NEW YORK--Natural-gas futures were little changed Wednesday as traders awaited direction from gas-inventory data due out Thursday.
Analysts said forecasts for lingering warmer-than-normal temperatures in the Midwest through mid-September have been factored into current prices.
Following the Labor Day holiday, updated forecasts for extended warmth in the region sent prices up 2.4% on Tuesday, to the highest level since July 24.
Traders are keeping an eye on two storms brewing near the Gulf of Mexico, but analysts said there isn't a need for alarm given current forecasts.
"Warmer temperature views have been efficiently discounted, the storm premium sees little need for additional expansion and the usual mid-week caution" is developing ahead of U.S. gas inventory data," said Jim Ritterbusch, president of Ritterbusch & Associates.
Natural gas for October delivery on the New York Mercantile Exchange was trading 0.3 cent, lower at $3.663 a million British thermal units.
The National Hurricane Center said disorganized showers over the Yucatan peninsula have only a 20% chance of becoming a tropical cyclone within the next five days, while an area of low pressure 200 miles southwest of Puerto Rico has a 40% chance of becoming a tropical cyclone in the next 48 hours.
Early indications from analysts call for Energy Information Administration data due at 10:30 a.m. EDT Thursday to show gas storage levels in the week ended Aug. 30 rose by more than they did the same week last year, but less than the five-year average for the week. EIA data show stocks rose by 33 billion cubic feet at this time last year, while the five-year average rise for the week is 60 bcf.
Injections into storage have been smaller than normal because of increased demand for gas from power companies, who burned more of the fuel to meet higher electricity demand for increased residential cooling needs during the recent stretch of late summer warmth in the Midwest and parts of the eastern U.S.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.71/mmBtu, according to IntercontinentalExchange, versus Tuesday's average of $3.655/mmBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $3.785/mmBtu, compared with $3.75/mmBtu on Tuesday.
