NewswireToday - /newswire/ -
Washington, DC, United States, 2012/03/07 - The US Energy Information Administration (EIA) is expected Thursday to report withdrawal from natural gas inventories of 82 billion cubic feet (Bcf) to 86 Bcf for the week ending March 2, 2012, according to a Platts survey of analysts - Platts.com. NYSE: MHP; NYSE: MHFI
A pull within that range would be larger than the 63-Bcf withdrawal in the same week in 2011 but smaller than the five-year-average drawdown of 92 Bcf, according to EIA data. As a result, the 756-Bcf surplus to a year ago could likely shrink, while the 780-Bcf surplus over the five-year average may expand.
The wider range of analyst estimates for the week that ended March 2 spanned from a withdrawal of 75 Bcf to 93 Bcf. The EIA estimated an 82-Bcf draw from storage for the week that ended February 24, dropping overall stocks to 2.513 trillion cubic feet (Tcf).
Gelber & Associates analyst Jonathan Arfa said last week's weather "was only marginally colder than the previous week's," but added that "large amounts of gas continued to be consumed for power generation, replacing relatively expensive coal and nuclear reactors that are undergoing maintenance."
Citi Futures Perspective analyst Tim Evans said the "expanding storage surplus could still pressure the market to new lows, but we can also imagine a scenario where the anticipation that reduced drilling activity will translate into weaker production could help prices hold firm, or even help lift the market at some point."
He added,"The rising storage surplus does indicate downward fundamental pressure on prices in our view, but the extreme in the storage capacity doesn't necessarily align with the extreme in prices."
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