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Sunday, August 26, 2012

Natural gas futures prices for august 27-31 2012

Natural gas futures for august 27-31 2012, nat gas prices next week : Natural gas futures tumbled nearly 4% Friday to settle at the lowest level in almost two months as concerns over bloated inventory levels and forecasts showing mild weather across much of the U.S. East Coast in the next two weeks weighed.

Meanwhile, market players continued to monitor tropical storm activity in the Gulf of Mexico, amid concerns over a disruption to supplies from the region.

On the New York Mercantile Exchange, natural gas futures for delivery in September settled at USD2.698 per million British thermal units by close of trade on Friday.

Prices hit USD2.685 per million British thermal units on Thursday, the lowest since June 28.

On the week, the front-month natural gas contract fell 1.55%, the fifth consecutive weekly decline.

Natural gas prices slumped to a seven-week low on Thursday, after a report from the U.S. Energy Information Administration showed U.S. gas supplies rose more-than-expected last week.

The U.S. Energy Information Administration said in its weekly supply report published Thursday that natural gas storage in the U.S. rose by 47 billion cubic feet last week, above market expectations for an increase of 38 billion cubic feet.

Total U.S. gas supplies stood at 3.308 trillion cubic feet last week, 14.7% above last year’s level and 12.1% above the five-year average level for the week.

Inventory didn't top the 3.3-trillion cubic feet level in 2011 until the end of September, with stocks peaking at a record 3.852 trillion cubic feet in November of last year.

Market analysts have warned that without strong demand through the rest of the summer cooling season, gas inventories will reach the limits of available capacity later this year.

The storage surplus to last year will have to be cut by at least another 150 billion cubic feet in the 14 weeks left before winter withdrawals begin to avoid breaching the government's 4.1 trillion cubic feet estimate of total capacity.

Early injection estimates for this week’s storage data range from 49 billion cubic feet to 62 billion cubic feet, compared to last year's build of 60 billion cubic feet. The five-year average change for the week is an increase of 62 billion cubic feet.

Traders also continued to monitor tropical storm activity in the Gulf of Mexico, amid concerns over a disruption to supplies from the region.

The U.S. National Hurricane Center said Friday Tropical Storm Isaac was moving northwest through the eastern Caribbean Sea, with forecast tracks showing the storm heading into the Gulf of Mexico early Monday, with possible landfall Wednesday.

Oil giant British Petroleum said it was shutting production at its Thunder Horse oil and gas platform in the Gulf of Mexico, the world's largest, in preparations for the storm.

However, most traders dismissed worries about possible supply cuts.

Offshore Gulf of Mexico gas output plays a much smaller role in supplying the nation than in recent years. Production in federal waters in the Gulf currently accounts for only 6% of natural gas output, down significantly from 17% in 2005.

Meanwhile, updated weather forecasts Friday continued to predict milder weather across key parts in the U.S. over the next two weeks.

Industry weather group MDA EarthSat said temperatures in the Northeast were trending cooler, while the South, a key region for air conditioning, "remains seasonally cool."

Cooler summer temperatures reduce the need for gas-fired electricity to power air conditioning, dampening demand for natural gas.

A bout of extreme heat across much of the U.S. over the past two months helped boost natural gas prices above the key USD3.00-level in recent weeks. Prices rallied to a 2012 high of USD3.275 per million British thermal units on July 31.

But futures have come under heavy selling pressure since the start of August, losing almost 15% after extended weather forecasts pointed to milder weather across most parts of the U.S. throughout most of the month.

From a technical standpoint, prices were expected to find strong near-term support close to the 200-day moving average of USD2.682.

200-day moving averages are considered key trading levels for many investors, often serving as a floor for prices after big declines.

Elsewhere in the energy complex, light sweet crude oil futures for October delivery traded at USD96.09 a barrel by close of trade on Friday, shedding 0.9% on the week.

Heating oil for September delivery rose 0.85% over the week to settle at USD3.118 per gallon by close of trade Friday.

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