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Natural gas falls on supply increase

Published 11/01/2012, 03:42 PM
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Investing.com - Natural gas futures moved lower during U.S. afternoon hours Thursday, after a report from the U.S. Energy Information Administration revealed U.S. gas supplies rose broadly in line with market expectations last week.
 
On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.683 per million British thermal units during U.S. afternoon trade, easing down 0.26% on the day.       

The December contract traded in a range of USD3.742 per million British thermal units, the daily high a session low of USD3.662. On Wednesday, futures fell to a seven-day low of USD3.658 per million British thermal units.

The December contract traded at USD3.677 prior to the release of the U.S. Energy Information Administration report.  

The U.S. EIA said in its weekly report that natural gas storage in the U.S. in the week ended October 26 rose by 65 billion cubic feet, broadly in line with market expectations for an increase of 67 billion cubic feet.

Inventories rose by 82 billion cubic feet in the same week a year earlier, while the five-year average change for the week is an increase of 57 billion cubic feet, according to U.S. Energy Department data.

Total U.S. natural gas storage stood at 3.908 trillion cubic feet as of last week. Stocks were 136 billion cubic feet higher than last year at this time and 259 billion cubic feet above the five-year average of 3.649 trillion cubic feet for this time of year.

U.S. natural gas stocks peaked at a record 3.852 trillion cubic feet in November of last year.

The report showed that in the East Region, stocks were 49 billion cubic feet above the five-year average, following a net injection of 34 billion cubic feet. 

Stocks in the Producing Region were 159 billion cubic feet above the five-year average of 1.118 billion cubic feet, after a net injection of 23 billion cubic feet.

Natural gas futures often reach a seasonal low in October, when mild weather reduces demand, before recovering in the winter, when heating-fuel use peaks.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Meanwhile, market players continued to assess the impact from Sandy, which paralyzed much of the U.S. East Coast region, a major gas-consuming area.

Several nuclear reactors in the region started to resume operations, easing concerns over a slowdown in demand.

Nuclear outages totaled nearly 30,600 megawatts early Thursday, down from 30,700 megawatts out on Wednesday. The five-year average for this time of year is an outage rate of about 22,800 megawatts.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December eased up 0.89% to trade at USD87.00 a barrel, while heating oil for December delivery shed 0.65% to trade at USD3.043 per gallon. 



 

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