The Energy Information Administration (“EIA”) reported today, U.S. natural gas inventories increased by 20 billion cubic feet (“Bcf”) for the week ended November 13 which was in line with analysts’ expectations. At 3,833 Bcf, stocks were 347 Bcf higher than last year at this time and 419 Bcf above the five-year average.
Natural gas traders continue to look at weather forecasts for signs of cold winter weather conditions to create greater demand for natural gas for heating. However, it appears that there is a lot of mixed weather forecasts out there, with some forecasts predicting moderate temperatures and others predicting cold weather in the major gas-consuming regions for late November and early December.
“Gas market participants are finding it hard to conclude that price will rise with fundamentals being as weak as they are,” – Mike Fitzpatrick, a broker with MF Global in New York, in a note to clients Thursday.
And though natural gas physical limitations are again being brought into question (physical storage limits are estimated at 3.9 to 4.0 trillion cubic feet) it is likely this will be avoided once cold weather heating kicks in. The greater concern is how natural gas inventories exit the winter heating season and impact 2010 production levels and the exploration budgets of natural gas producers.
“At this point it really does come down to the weather,” said Peter Beutel, the President of Cameron Hanover, a New Canaan, Conn. energy advisory firm.
