Natural gas futures - Weekly outlook: July 22 - 26

Natural gas futures edged lower on Friday, as some investors cashed out of the market to lock in gains from the previous session’s 5% rally that took prices to a four-week high.

Updated weather forecasts showing that a heat wave in the U.S. Northeast and Midwest was expected to give way to below-normal temperatures this week also weighed.

On the New York Mercantile Exchange, natural gas futures for delivery in August fell 1.1% on Friday to settle the week at USD3.771 per million British thermal units.

Despite Friday’s downbeat performance, natural gas prices rose 3.45% on the week, the third consecutive weekly advance.

Nymex gas futures surged 5.1% on Thursday to hit a four-week high of USD3.814 per million British thermal units, following the release of bullish U.S. supply data.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 58 billion cubic feet last week, below market expectations for an increase of 64 billion cubic feet.

Inventories rose by 29 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 70 billion cubic feet.

Total U.S. natural gas storage stood at 2.745 trillion cubic feet as of last week, 1.2% below the five-year average and 13% below last year's level.

Early injection estimates for this week’s storage data range from 45 billion cubic feet to 60 billion cubic feet, compared to a 26 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 53 billion cubic feet.

Meanwhile, market players continued to focus on near-term weather forecasts to gauge the strength of demand for the fuel.

Updated weather forecasting models released Friday pointed to milder weather temperatures across most parts of the U.S. Northeast and Midwest for the rest of July.

The U.S. National Weather Service pointed to below-normal temperatures covering the heavily populated Northeast and Midwest regions over the next six to 14 days.

Mild summer temperatures reduce the need for gas-fired electricity to cool homes.

Elsewhere in the energy complex, light sweet crude oil futures for September delivery settled at USD108.23 a barrel by close of trade on Friday, adding 2.1% on the week. 

Meanwhile, heating oil for August delivery tacked on 2% over the week to settle at USD3.095 per gallon by close of trade Friday.

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Crude oil futures - Weekly outlook: July 22 - 26

                    New York-traded crude oil futures ended Friday’s session at the highest level since March 2012, amid indications of improving demand from the U.S. and after Federal Reserve Chairman Ben Bernanke said that the central bank will maintain its easy monetary policy for the foreseeable future.

On the New York Mercantile Exchange, light sweet crude Oil futures for delivery in September rose 0.4% Friday to settle the week at USD108.23 a barrel by close of trade.

Earlier in the day, New York-traded oil prices rose to a session high of USD108.92 a barrel, the strongest level since March 3, 2012. 

On the week, Nymex oil futures advanced 2.1%, the fourth consecutive weekly gain. The U.S. benchmark has rallied nearly 14% over the past four weeks.

Appetite for riskier assets improved after Bernanke said in testimony to Congress that there was no set timeline for the central bank to withdraw its stimulus measures. 

Bernanke said the central bank could scale back its asset purchases by the end of the year if the economy continues to improve, but added that there was no “preset course.”

The Fed Chairman added that the economic recovery was continuing at a moderate pace and that monetary policy will remain accommodative for the foreseeable future.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

Oil prices were also supported after Wednesday’s bullish U.S. inventory report showed that crude oil inventories fell by 6.9 million barrels last week, compared to expectations for a decline of 2 million barrels. 

Crude supplies in the U.S. are down 27.1 million barrels in three weeks ended July 12, the most in weekly statistics dating back to 1982.

In the week ahead, the U.S. is to publish data on the housing sector and manufacturing to further gauge the strength of the U.S. economy.

The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand. 

Market players will also be looking ahead to Wednesday’s data on Chinese manufacturing activity, amid ongoing concerns over the country’s economic outlook.

China’s central bank said on Friday it was removing the lower limit on interest rates for banks, to help lenders attract more borrowers and spur economic activity.

China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for September delivery shed 0.2% on Friday to settle the week at USD108.48 a barrel.

The London-traded Brent contract lost 0.3% over the week, while the spread between the Brent and the crude contracts stood at USD0.25 a barrel by close of trade on Friday.

Earlier in the session, U.S. crude for September delivery reached a USD0.05 premium over Brent for the first time since October 2010. As recently as February of this year, London-traded Brent was at a USD23 premium over U.S. crude.

The gap between the contracts has been on a downward trend in recent months, amid an improving production outlook in the North Sea and indications of declining stockpiles at Cushing, Oklahoma, the delivery point for Nymex oil futures.

Stocks at Cushing have fallen to 46 million barrels from 52 million in January. - investing.com

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Gold / Silver / Copper futures - Weekly outlook: July 22 - 26

                 Gold futures ended Friday’s session just below a one-month high, after comments by Federal Reserve Chairman Ben Bernanke earlier in the week eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery rose 0.8% on Friday to settle the week at USD1,295.05 a troy ounce. 

Gold futures were likely to find support at USD1,242.35 a troy ounce, the low from July 10 and near-term resistance at USD1,301.75, the high from June 21.

On the week, gold prices advanced 0.85%, the second consecutive weekly gain.

Comex gold prices rose to a one-month high of USD1,299.45 a troy ounce on Wednesday after Bernanke said the pace of the central bank’s bond purchases are not a “preset course”.

In the first day of his semi-annual testimony to Congress, Bernanke reiterated that the Fed will continue to maintain its accommodative monetary policy for the foreseeable future.

He added that the central bank may taper its USD85-billion-a-month asset-purchase program later this year and halt it around mid-2014.

Bernanke said the pace of purchases could be maintained longer if conditions are less favorable.

The precious metal is on track to post a loss of 23% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies. 

In the week ahead, the U.S. is to publish data on the housing sector and manufacturing to further gauge the strength of the U.S. economy.

Any improvement in U.S. economic activity could scale back expectations for further easing, boosting the dollar and weighing on gold.

Elsewhere on the Comex, silver for September delivery eased up 0.4% on Friday to settle the week at USD19.46 a troy ounce. Despite Friday’s modest gains, silver future prices lost 2.15% on the week.

Meanwhile, copper for September delivery rose 0.5% on Friday to close the week at USD3.146 a pound. 

The red metal found support on Friday after China’s central bank said it was removing the lower limit on interest rates for banks, to help banks attract more borrowers.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Despite Friday’s upbeat performance, Comex copper prices shed 0.25% on the week.

Copper traders will be looking ahead to Wednesday’s data on Chinese manufacturing activity, amid ongoing concerns over the country’s economic outlook. - investing.com

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