Natural Gas Stockpiles Probably Rose Less Than Seasonal Average

U.S. natural-gas supplies probably rose less than the seasonal average last week as warmer-than- normal weather spurred air conditioner use in the South, according to analyst estimates compiled by Bloomberg before a government report tomorrow.

Inventories rose 37 billion cubic feet to 1.691 trillion in the week ended April 22, according to the median of 15 estimates. An increase of that size would be the smallest for the fourth week of April since 2002 and erase a surplus to the five-year average stockpile level.

Hot weather in the South and a decrease in nuclear power supply because of maintenance boosted demand for gas-fired generators, which account for about 30 percent of U.S. gas use, according to the Energy Department.

“In the last couple of weeks we’ve seen cold weather in the North and hot weather in the South, and that’s increasing demand for gas,” said Carl Neill, an energy consultant at Risk Management Inc. in Atlanta. “The weather pattern is changing and it’s interesting to see how the market will react.”

The stockpile estimates ranged from increases of 30 billion to 41 billion cubic feet. The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow.

The five-year average stockpile change for the week ended April 22 is an increase of 65 billion cubic feet, according to Energy Department data. Supplies jumped 81 billion cubic feet a year earlier.

Cooling Degree Days

Cooling degree days in South Atlantic states in the week ended April 21 were 93 percent higher than a year earlier and 81 percent above normal levels, according to the National Oceanic and Atmospheric Administration. Degree days are used as a measure of demand for power. Temperatures in Atlanta reached 87 degrees Fahrenheit (31 Celsius) on April 19, 13 degrees higher than normal, according to State College, Pennsylvania-based AccuWeather Inc.

Stockpiles rose 47 billion cubic feet to 1.654 trillion in the week ended April 15, last week’s report showed. Analysts expected an increase of 52 billion.

Gas on the New York Mercantile Exchange gained 2.4 percent to $4.412 per million British thermal units on April 21, after last week’s report was released. Prices slid 0.6 cent at 10:59 a.m. to $4.381 today.

The number of rigs drilling for natural gas in the U.S. slipped seven to 878 last week, according to Houston-based Baker Hughes Inc. The gas rig count has dropped 11 percent since touching 992 in the week ended Aug. 13.

“The spread between oil and gas rigs in the U.S. is the highest since 1993,” said Craig Shere, a natural gas analyst with Tuohy Brothers in New York.

(Source: http://www.bloomberg.com/news/2011-04-27/natural-gas-stockpiles-probably-rose-less-than-seasonal-average.html)