Natural gas gains on talk winter storm will pummel stockpiles

               Natural gas futures shot up on Wednesday as a powerful winter storm trekked across the southeastern U.S. and fueled expectations that snow, ice and freezing temperatures are taking their toll on stockpiles as homes and business crank up their heating.

The March contract settled up 5.35% on Tuesday to end at USD4.824 per million British thermal units.On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD4.932 per million British thermal units during U.S. trading, up 2.23%. The commodity hit session high of USD5.027 and a low of USD4.781.

Natural gas futures were likely to find support at USD4.564 per million British thermal units, Monday's low, and resistance at USD5.734, the high from Feb. 5.

Investors were betting that a powerful winter storm dumping snow and ice across the southeastern U.S. will prompt thermal power plants to burn more natural gas to meet demand, which should take its toll on the country's inventories.

The U.S. National Weather Service said that the southern part of the U.S. may get 1 to 3 inches (2.5-7.5 centimeters) of snow and sleet over the next three days, while the northeastern U.S. could see wintery weather as the system tracks towards the Atlantic.

Bullish speculators are betting that the winter storm will increase demand for the heating fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Prices saw support amid speculation weekly supply data due on Thursday will show a larger-than-expected drop in U.S. natural gas inventories due to cold weather.

Early withdrawal estimates for this week’s storage data range from 225 billion cubic feet to 240 billion cubic feet. The five-year average change for the week is a decline of 162 billion cubic feet.

Total U.S. natural gas storage fell by 262 billion cubic feet last week to 1.923 trillion cubic feet, approximately 22% below the five-year average for this time of year and nearly 29% below last year’s unusually high level.

Natural-gas inventories have fallen sharply since November as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were up 0.58% and trading at USD100.52 a barrel, while heating oil for March delivery were down 0.36% and trading at USD3.0172 per gallon. - investing.com