Natural gas futures slumped to the lowest level in more than three months on Friday, as market players weighed shifting weather forecasts to assess the outlook for US demand and supply levels.
On the New York Mercantile Exchange, natural gas for delivery in October dropped 4.7 cents or 1.77%, to end the week at USD 2.605 per million British thermal units. Futures hit an intraday low of USD 2.602, the weakest level since June 5th.
Meanwhile, the November contract slumped 5.2 cents, or 1.91%, to close at USD 2.676.
For the week, natural gas prices lost 9.7 cents or 3.27%.
Demand for natural gas is expected to be moderate next week as cooler weather moves across the eastern part of the US Meanwhile, weather in the west will be warmer before cooling off as the week progresses.
Summer heat has waned and cooler temperatures beckon with the approach of autumn. Natural gas accounts for about a quarter of US electricity generation.
Data released Thursday showed that US natural gas supplies rose broadly in line with market expectations last week.
According to the Energy Information Administration, natural gas storage increased by 73 billion cubic feet, matching forecasts. Supplies rose by 90 billion cubic feet in the same week last year, while the 5 year average change is an increase of 75 billion cubic feet.
Total US natural gas storage stood at 3.334 trillion cubic feet, 15.8% higher than during the same week a year earlier and 4.1% above the five-year average for this time of year.
Last spring, supplies were 55% below the 5 year average, indicating producers have made up for all of last winter’s unusually strong demand.
The EIA’s next storage report slated for release on Thursday, September 24th is expected to show a hefty build of approximately 105 billion cubic feet for the week ending September 18th.
That compares with builds of 96 billion cubic feet in the same week last year, while the 5 year average change for the week is an increase of 83 billion cubic feet.
Source : INVESTING.COM
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