Thursday, August 30, 2012

Natural gas futures for september 2012

Natural gas futures forecast september 2012 - New front month mixed after demand dampening from Isaac : Natural-gas futures swirled to an intraday low, then recovered to post a session high after U.S. government data showed inventories rose more than expected last week.

Gas storage rose by 66 billion cubic feet in the week ended Aug. 24, to 3.374 trillion cubic feet, a record high for this time of year and a level that wasn't touched in 2011 until the end of September. Stocks are 14.6% above a year ago, and 12% above the five-year average.

The increase topped analysts' expectations for a rise of 62 billion cubic feet and exceeded historical gains for the week. Last year, stocks rose by 60 bcf, while the average rise in the week over the previous five years was 62 bcf.

the EIA data was "modestly bearish." But he noted that "with Hurricane Isaac having an impact on production this week, we think the market will quickly pivot to looking forward, rather than dwelling on last week's results."

Hot summer weather and strong demand for gas from power generators has trimmed the level of injections into storage this summer, compared with historical levels, but high output has kept inventories growing.

In the latest rise, gas injections topped the year-earlier level on a weekly basis for the time since mid-April, said Matt Smith, analyst at Summit Energy.

Storage levels are likely to be difficult to assess next week, due to the impact on lost supply from Hurricane Isaac, and the storm-related slowdown in demand.

MDA EarthSat Weather sees above-normal temperatures across much of the U.S. through Sept. 3, except for the parts of the northwest and southwest, where normal temperatures are expected. Parts of the Midwest and upper-Midwest can expect much-above-normal temperatures through the Labor Day holiday Monday. But that will be followed by normal Midwest temperatures, which will stretch to the East Coast by mid-month, when temperatures in the Deep South drop to below normal, the forecasters said.

We have some warmer-than-normal weather on the docket for next week, enough to keep the shorts at bay for the weekend, referring to investors who were looking to sell the market in anticipation of lower near-term prices.

There's plenty of areas out there like Texas which will burn a lot of gas over the next two weeks as temps stay aloft of 90" degrees Fahrenheit

Government data show some 72% of U.S. Gulf natural gas output, or 3.2 billion cubic feet per day, was shut in was of Wednesday, as Hurricane Isaac moved through the region. But facilities are expected to be brought back on line quickly after inspections in coming days, if no damage is discovered. Gulf gas output accounts for just about 5% of U.S. supply, down from about 15% in 2005, amid the growth in onshore shale gas output.

cooler temperatures and power outages resulting from the storm are offsetting much of the impact of the temporary supply loss.

Isaac came ashore late Tuesday in southeastern Louisiana, leaving more than 700,000 homes and businesses along the coast of the state and surrounding states without power still on Thursday.

The storm had forced the shut down of nearly 72 percent, or more than 3.22 billion cubic feet per day, of offshore U.S. natural gas output. But with the storm only reaching a low-level Category 1 strength, outages should not be lengthy and damage, if any, should be light, traders said.

Strong nuclear outages and more above-normal temperatures could help support prices once the storm concerns ease.

But most traders expect prices to have a hard time breaking back above $3 per million British thermal units, the level where gas loses much of its appeal over coal for power generation.

The National Weather Service's six- to 10-day outlook issued on Monday again called for above-normal temperatures across much of the nation, but normal or below-normal readings were now on tap for most of the mid-Continent and on the West Coast.

On the nuclear front, total outages were about 9,800 megawatts, or 10 percent of U.S. capacity on Thursday, up from 8,80 MW out on Wednesday, 8,600 MW out a year ago and a five-year outage rate of about 5,200 MW.

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