U.S. gas: Futures continue slide after storage-build report

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Natural-gas futures fell back to a typical area of support Friday after Thursday's bigger-than-expected stockpile injection killed an earlier rally.

The benchmark contract climbed Tuesday and Wednesday after reports of unseasonably cold weather in the upper Midwest and stubborn heat around Texas offered the prospect of slightly higher demand from both furnaces and air-conditioning units using electricity from gas-fired power plants.

Private weather forecaster MDA EarthSat on Friday softened its projections for both warm Texas weather and the cold front farther north, a bearish sign that sent futures back to $3.80 million British thermal units.

Gas for October delivery on the New York Mercantile Exchange was recently off 1.3%, or 5 cents, at $3.828/mmBtu. The contract reached as high as $4.099/mmBtu earlier in the week.

The Energy Information Administration reported a gas injection of 87 billion cubic feet for the week ended Sept. 9, indicating lower demand after cooler temperatures and the fallout from two tropical cyclones slashed power use in much of the country.

Market watchers this afternoon will next look at oilfield services firm Baker Hughes' weekly rig count survey, which hints at production trends. The tally of rigs drilling for natural gas slipped during the previous two weeks, but traders have said the current production level is so high relative to demand that many have factored the small recent changes out of the equation.

"I know that there's a ton of producers that would come online if the price went up to $6," said MF Global senior market strategist Rich Ilczyszyn said.

Ilczyszyn said he thought earlier in the year that growing industrial demand might buoy the market, but that factor has stagnated amid worries of a new economic slowdown.

The Federal Reserve reported a 0.2% bump to August industrial production, as utility output sank 3% on milder weather.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


Comprima V 150 XC T and Comprima V 180 XC T round balers

Krone North America introduces the Comprima V 150 XC T (4’ x 39” – 59”) and Comprima V 180 XC ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Leads to Insight