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Natural gas futures - Weekly review: July 25-29

Published 07/31/2011, 10:55 AM
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Investing.com – Last week saw natural gas futures sink to a three-week low on Friday, as ample U.S. supplies and moderating weather forecasts in the U.S. next week pressured prices lower.

On the New York Mercantile Exchange, natural gas futures for delivery in September settled at USD4.151 per million British thermal units by close of trade on Friday, plunging 5.25% over the week, the second consecutive weekly decline. 

It earlier fell to USD4.139 per million British thermal units, the lowest price since July 8.

Natural gas prices tumbled nearly 2.1% on Thursday after the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. rose by 43 billion cubic feet last week, above expectations for an increase of 38 billion cubic feet.

Stockpiles advanced by 31 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a buildup of 49 billion cubic feet.

Total U.S. natural gas storage stood at 2.714 trillion cubic feet, 2.3% below the five-year average of 2.779 trillion cubic feet and 6.9% below 2010 levels.

Natural gas futures extended losses on Friday after the Commodity Weather Group said that the recent hot weather pattern that engulfed the Eastern U.S. states was expected to recede, with forecasts in the next two weeks moderating back towards seasonally normal temperatures.  

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

Meanwhile, easing concerns over a disruption to supplies in the Gulf of Mexico also weighed after the U.S. National Hurricane Center downgraded Don from a tropical storm to a depression on Friday.

Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 10% of U.S. natural gas production.

Elsewhere on the Nymex, light sweet crude oil futures for September delivery traded at a two-week low of USD95.97 a barrel by close of trade on Friday, dropping 3.65% over the week, while heating oil for September delivery shed 1.3% on the week to trade at USD3.101 a gallon.

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