CT: US GAS Futures Slip On Weather Forecasts, Supplies
NEW YORK (Dow Jones)--Natural gas futures slipped Wednesday as warm-weather forecasts and robust supplies continued to pressure the market lower.
Natural gas for April delivery on the New York Mercantile Exchange was trading 4.9 cents lower, or 1.09%, at $4.467 a million British thermal units after opening 5.2 cents lower at $4.464/MMBtu.
Spring-like weather in the eastern U.S. and a deluge of supply from onshore shale-rock formations had traders aiming for the key $4/MMBtu level, although bargain-buying was providing some support for prices.
"Every analyst and every trader I've talked to is targeting $4 even," said Mike Rose, the director of the energy trading desk at brokerage Angus Jackson Inc. in Fort Lauderdale, Fla. "We're going to get a tug-of-war between the guys who think we're in a bargain situation and the guys who want to push it a little lower."
Forecasts from MDA EarthSat, a Rockville, Md. private forecaster, were pointing to above-normal temperatures across much of the continental U.S., with the exception of the South Central region and Southeast, from March 15 to March 19. MDA was predicting warmer-than-normal temperatures in the Northeast, along with parts of the West, Great Lakes region and Mid-Atlantic, from March 20 to March 24.
The National Weather Service was forecasting above-normal temperatures in northern New England and parts of the Midwest from March 15 to March 19. But from March 17 to March 23, NWS was expecting cooler-than-normal temperatures in parts of the eastern and southern U.S.
Abundant supplies were also driving gas futures lower Wednesday. Despite hefty draws from storage during the winter, U.S. gas inventories stood at 1.737 trillion cubic feet as of Feb. 26, 1.2% above the five-year average for the same week.
"Bulls need some good economic news, or an exogenous event to provoke buying, in the meantime it looks like we are on the course of a slow grind down to $4.00 which will likely be the floor before hurricane reports and summer demand," wrote Drew Wozniak, an analyst with ICAP Energy in Louisville, Ky., in a note to clients Wednesday.
-By Christine Buurma, Dow Jones Newswires; 212-416-2143; christine.buurma@dowjones.com
