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Falling Stockpiles Lead to Higher Prices on Natural Gas

January 18, 2013 at 1:30 by Vladimir Vyun

Natural gas retreated somewhat today after yesterday’s rally. The rally was caused by falling inventories and anticipation of cold weather.

The US Energy Information Administration reported that stockpiles of natural gas decreased by 148 billion cubic feet to 3.168 trillion last week. The reserves were 147 billion cubic feet (4.4 percent) less than at the same period last year. That was the lowest level in 17 months.

The commodity was also rising as forecasters predicted that colds will hit the United States. That means increasing demand for natural gas as it is used by about 50 percent of US households for heating, according the data of the EIA. Falling reserves and rising consumption lead to higher prices.

February futures for delivery of natural fell a little by $0.02 (0.43 percent) to $3.48 per million British thermal units as of 1:24 GMT on NYMEX today.

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