Natural Gas Down -2.35% At 232.20 Slid To A Nearly 8-Month Low
CommodityOnline | Jul 22, 2014 05:58AM ET
Naturalgas settled down -2.35% at 232.20 slid to a nearly eight-month low as another sweep of unseasonably cool weather across the U.S. is expected to keep a lid on demand. Gas prices have slid 24% since mid-June as cooler-than-normal temperatures have reined in the use of power-thirsty air conditioning. In the hotter months of summer, rising electricity consumption has spurred power plants' natural-gas demand. This year, the lack of that additional demand has resulted in a rapid buildup of natural-gas supplies, which has weighed on prices. The cooler-than-normal temperatures have extended into the latter half of July and are poised to continue into the beginning of August, a period that is usually the hottest of the season.
The six- to 10-day forecast calls for temperatures 10 to 15 degrees Fahrenheit below normal to descend across the Plains and Midwest, while the eastern region looks to maintain a cool seasonal range in the 70s and 80s. Last week's supply report weighed on prices as well. The U.S. Energy Information Administration said in its weekly report last Thursday that natural gas storage in the U.S. rose by 107bcf last week, well above expectations for an increase of 98bcf.
The five-year average change for the week is an increase of 65bcf. Total U.S. natural gas storage stood at 2.129 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 25.5%, down from a record 54.7% at the end of March. Technically market is under long liquidation as market has witnessed drop in open interest by -5.35% to settled at 8992, now Naturalgas is getting support at 229.8 and below same could see a test of 227.3 level,and resistance is now likely to be seen at 236, a move above could see prices testing 239.7.
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