Water Jug is a useless junk Item: no purpose other than trading and only worth a small amount. This item can be found in Residential Buildings. When starting out, stealing this item along with other junk can help players increase their Thievery stat with little risk (if the building is empty) and reward.
Despite being full of Water, the Water Jug is not functional in the same way which barrels of water are. Water Jugs cannot be used in a farm or a cooking stove. They are also not a viable food item.