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Natural gas futures - weekly outlook: July 28 - August 1

Published 07/27/2014, 10:40 AM
U.S. gas futures end the week down 4.3% on bearish supply, demand outlook
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Investing.com - U.S. natural gas futures ended Friday’s session close to an eight-month low, as demand for the fuel was likely to remain limited after meteorologists predicted mild summer weather in much of the U.S.

On the New York Mercantile Exchange, natural gas for delivery in August tumbled 1.72%, or 6.6 cents, on Friday to settle at $3.781 per million British thermal units by close of trade.

Natural gas futures fell to $3.744 on Thursday, the lowest since November 26.

On the week, Nymex natural gas prices lost 4.3%, or 17.0 cents, the sixth consecutive weekly decline.

Futures were likely to find support at $3.741 per million British thermal units, the low from November 26 and resistance at $3.886, the high from July 24.

Natural gas prices have been under heavy selling pressure in recent sessions after updated weather-forecasting models called for cooler temperatures across most parts of the heavily-populated Midwest and Northeast regions over the next ten days.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.

Prices rallied more than 2% on Thursday after the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 90 billion cubic feet, below expectations for an increase of 96 billion cubic feet.

The five-year average change for the week is an increase of 46 billion cubic feet.

Total U.S. natural gas storage stood at 2.219 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 23.5%, down from a record 54.7% at the end of March.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in natural gas futures in the week ending July 22.

Net longs totaled 27,748 contracts, down 26.2% from net longs of 37,617 in the previous week.

Elsewhere on the Nymex, crude oil for September delivery settled at $102.09 a barrel by close of trade on Friday, up 0.13%, or 14 cents, on the week.

Meanwhile, heating oil for August delivery advanced 2.19% on the week to settle at $2.912 per gallon by close of trade Friday.

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