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Natural gas moves lower on supply

Published 05/25/2012, 10:11 AM
Updated 05/25/2012, 10:12 AM
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Investing.com - Natural gas futures traded lower Friday, adding to earlier losses as Thursday’s  report from the U.S. Energy Information Administration indicated  U.S. gas supplies rose broadly in line with market expectations.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD2.643 per million British thermal units during U.S. morning  trade, giving back 2.40%.       

The June contract is due to expire at the end of trading on May 29.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended May 18 rose by 77 billion cubic feet, broadly in line with expectations for an increase of 76 billion cubic feet.

Inventories rose by 101 billion cubic feet in the same week a year earlier, while the five-year average change for the week is an increase of 97 billion cubic feet, according to U.S. Energy Department data.

Total U.S. natural gas storage stood at 2.744 trillion cubic feet as of last week. Stocks were 750 billion cubic feet higher than last year at this time and 753 billion cubic feet above the five-year average of 1.991 trillion cubic feet for this time of year.

The report indicated that in the East Region, stocks were 381 billion cubic feet above the five-year average, following a net injection of 45 billion cubic feet. 

Stocks in the Producing Region were 274 billion cubic feet above the five-year average of 790 billion cubic feet, after a net injection of 19 billion cubic feet.

Sentiment on the fuel has improved in recent weeks. Prices are up more than 30% since hitting a decade-low of USD1.902 on April 19, amid indications major North American natural gas producers were cutting back on production.

Speculation that utility providers in the U.S. were switching from pricier coal to cheaper natural gas provided further support over recent weeks. 

However, market players noted that sustained prices back above USD2.50 and toward the USD3.00-level likely would inspire some switching back to coal.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July rose 0.39% to trade at USD91.02 a barrel, while heating oil for June delivery added 0.6% to trade at USD2.829 per gallon. 



 

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