U.S. natural gas extends bounce off 7-week low

U.S. natural gas extends bounce off 7-week low
Wednesday, January 11, 2017 - 14:48

Investing.com - U.S. natural gas futures were higher for the second day in a row on Wednesday, moving further away from a seven-week low as forecasts for the end of January turned colder, boosting demand for the heating fuel.

Weather models initially predicted mild temperatures throughout most parts of the U.S. during the period.

Natural gas for February delivery on the New York Mercantile Exchange jumped 2.2% to a session high of $3.352 per million British thermal units.

It was last at $3.302 by 9:50AM ET (14:50GMT), up 2.5 cents, or around 0.8%, after soaring 17.5 cents, or almost 5.7%, on Tuesday.

Prices of the heating fuel plunged to a seven-week low of $3.098 at the start of the week as forecasts of mild January weather replaced predictions of severe cold.

Natural-gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns.

About half of U.S. homes use natural gas for heating.

Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 135 and 143 billion cubic feet in the week ended January 6.

That compares with a withdrawal of 49 billion cubic feet in the preceding week, 168 billion a year earlier and a five-year average drop of 167 billion cubic feet.

Total natural gas in storage currently stands at 3.311 trillion cubic feet, according to the U.S. Energy Information Administration, 9.9% lower than levels at this time a year ago and less than 1% below the five-year average for this time of year.

© Reuters.

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