Sunday, September 16, 2012

Natural Gas prices for september 17-21 2012

Natural Gas prices for september 17-21 2012 : Natural gas futures came under heavy selling pressure on Friday, falling nearly 3% as forecasts showing cooler temperatures across much of the U.S. and ongoing concerns over bloated inventory levels weighed on the commodity.

On the New York Mercantile Exchange, natural gas futures for delivery in October tumbled 2.7% on Friday to settle at USD2.955 per million British thermal units by close of trade.

Earlier in the day, prices hit a session low of USD2.922 per million British thermal units, the weakest level since September 11.

Despite Friday's losses, natural gas prices ended the week with a 9% gain.

On Thursday, front-month prices climbed to a five-week high of USD3.070 per million British thermal units, before turning lower on profit taking.

Updated weather forecasts Friday predicted temperatures for the eastern two-thirds of the nation to average normal or below normal for at least the next two weeks, weighing on late-season demand expectations.

Meanwhile, MDA Earthsat, a private forecaster, said cooler-than-normal temperatures are expected to move across much of the U.S. through the end of September.

The weather forecaster added that below-normal temperatures are likely to be "widespread" across the Midwest in its six-to-ten-day forecast, while East Coast temperatures will drop over the next 11 to 15 days.

Natural gas demand typically rises in the summer as air-conditioning use boosts utility demand, then sinks in the fall as demand weakens ahead of the peak winter heating season.

Ongoing concerns over bloated U.S. inventory levels also added to the selling pressure.

The U.S. Energy Information Administration said in its weekly supply report published Thursday that natural gas storage in the U.S. rose by 27 billion cubic feet, just below market expectations for an increase of 28 billion cubic feet.

Last year, stocks rose by 80 billion cubic feet, while the average rise in the week over the previous five years was 72 billion cubic feet.

Total U.S. gas supplies stood at 3.429 trillion cubic feet, 11% above last year’s level and 9% above the five-year average for the week.

Inventory did not top the 3.4-trillion cubic feet level in 2011 until October 5, 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 100 billion cubic feet in the 11 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 40 billion cubic feet to 71 billion cubic feet, compared to last year's build of 89 billion cubic feet. The five-year average change for the week is an increase of 73 billion cubic feet.

Elsewhere in the energy complex, light sweet crude oil futures for October delivery traded at USD98.99 a barrel by close of trade on Friday, gaining 2.7% on the week.

Heating oil for October delivery climbed 2.53% over the week to settle at USD3.241 per gallon by close of trade Friday, the highest level since March 19.

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