US natural gas futures rose for the fourth straight session on Wednesday and touched its highest level in November as a weekly inventory report showed an unexpected withdrawal despite forecasts for warmer-than-usual weather over the next two weeks. The US Energy Information Administration (EIA) said utilities withdrew 2 billion cubic feet (bcf) of gas from storage in the week ended November 18, against an expected build of 5 bcf in a Reuters poll.
That compared with builds of 30 bcf in the prior week and 10 bcf in the same week last year and a five-year average withdrawal of 27 bcf. After gaining over 10 percent in the past three sessions front-month gas futures for December delivery on the New York Mercantile Exchange settled up 4.4 cents, or 1.5 percent, to $3.026 per million British thermal units.
The contract rose as high as 2.7 percent and touched a session high of $3.062, its highest level since October 31. "The 2 bcf net withdrawal for last week was at the bullish end of the range of market estimates, although still not supportive compared with the 27 bcf five-year average draw for the date," Citi Futures energy futures specialist Tim Evans said in a research note.
"The market should be able to quickly shift ahead to the forecast for coming reports, which should show the impact of colder temperatures, yielding stronger comparisons with past years," it said. As the December contract enters its last week as the front-month during the holiday-shortened week, the market has shifted its focus to futures for the rest of the winter.
NYMEX futures with the most open interest were January at 297,000 contracts, March at 183,300, April at 102,200 and February at 81,900. There were just 23,900 December contracts open. Thomson Reuters projected US gas usage would climb to an average of 87.7 bcf per day this week and 88.1 bcfd next week from 77.4 bcfd last week, with heating demand expected to rise. Gas supplies, meanwhile, were expected to edge upward to around 78.4 bcfd this week and next from 78.1 bcfd last week as US output slowly rises, data showed.
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