4 Aug 2014

Natural gas futures - weekly outlook: August 4 - 8


                     U.S. natural gas futures lost more than 1% on Friday, as demand for the fuel was likely to remain limited after meteorologists predicted mild summer weather in much of the U.S. through the next few days.
On the New York Mercantile Exchange, natural gas for delivery in September dropped 1.12%, or 4.3 cents, on Friday to settle the week at $3.798 per million British thermal units by close of trade.
Futures were likely to find support at $3.725 per million British thermal units, the low from July 28 and resistance at $3.890, the high from July 31.
Natural gas prices have been under heavy selling pressure in recent sessions after updated weather-forecasting models called for mild summer weather across much of the U.S. over the next several days.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Despite Friday’s losses, Nymex natural gas prices tacked on 0.44%, or 1.7 cents, on the week, the first weekly gain in seven weeks.
Natural gas futures rallied almost 1.5% on Thursday after the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 88 billion cubic feet, below expectations for an increase of 93 billion cubic feet.
Total U.S. natural gas storage stood at 2.307 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 21.7% from 23.5% a week earlier and down from a record 54.7% at the end of March.
The EIA's next storage report is slated for release on Thursday, August 7, with analysts expecting a build of 87 billion cubic feet for the week ending August 1.
Inventories rose by 90 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 49 billion cubic feet.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers significantly decreased their bullish bets in natural gas futures in the week ending July 29.
Net longs totaled 16,060 contracts, down 42.1% from net longs of 27,748 in the previous week.
Elsewhere on the Nymex, U.S. crude oil for September delivery settled at $97.88 a barrel by close of trade on Friday, down 4.12%, or $4.21, on the week.
Meanwhile, heating oil for September delivery slumped 1.57% on the week to settle at $2.866 per gallon by close of trade Friday. - investing.com

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