LONDON (Commodity Online): Natural Gas prices experienced mixed price action on the day, with the front of the curve inching up because of a colder weather outlook while the back of the curve edged slightly lower.
The prompt contract finished at $3.46/MMBtu, up by four cents, while calendar 2012 piled on a penny to $3.68. Calendar 2013, on the other hand, shaved off two cents to $4.27. Although the morning report showed an incrementally warmer weather forecast for the 6-10 day period, the noon update reversed the outcome and reported a colder outlook for the same period.
This week's EIA storage report exhibited another net inventory withdrawal that was larger than the market had expected. As a whole, the country took out 20 Bcf from stocks, which was 8 Bcf more than the consensus withdrawal of 13 Bcf.
The East subtracted 16 Bcf, while the West actually added 1 Bcf. The Producing region took out 5 Bcf. This puts inventory at 102 Bcf higher than last year at this time and 307 Bcf above the five-year average.
We suspect that the consistently larger-than-consensus inventory withdrawals have been due to Coal displacement in the Eastern region of the country as the less efficient coal plants lose their competitive edge over the cheaper-to-run gas ones in the power stack.
Cash prices mostly fell on the day. Henry Hub came off by three cents, to $3.42, while SoCalBorder fell by six cents, to $3.62. Transco-Z6 New York was down by 15 cents, to $3.79.
