Natural gas futures reverse losses in volatile trade
Investing.com
Published Jun 29, 2015 10:40AM ET
U.S. natural gas futures turn higher in volatile trade
Investing.com - U.S. natural gas prices erased losses to trade higher on Monday, as investors monitored shifting weather forecasts to gauge the strength of demand for the fuel in the near-term.
Natural gas for delivery in August hit a session low of $2.735 per million British thermal units on the New York Mercantile Exchange before recovering to trade at $2.821 during U.S. morning hours, up 5.0 cents, or 1.82%. Futures were likely to find support at $2.733, the low from June 24, and resistance at $2.869, the high from June 25.
Updated weather forecasting models called for mostly average temperatures across most parts of the U.S. in the next two weeks.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.
On Friday, natural gas prices tumbled 9.6 cents, or 3.35%, to close at $2.770 per million British thermal units. The August natural gas contract lost 7.0 cents, or 2.46%, last week, the first weekly decline in three weeks.
The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 75 billion cubic feet, compared to expectations for an increase of 77 billion and following a build of 89 billion cubic feet in the preceding week.
Supplies rose by 110 billion cubic feet in the same week last year, while the five-year average change is an increase of 86 billion cubic feet.
Total U.S. natural gas storage stood at 2.508 trillion cubic feet as of last week, 38.3% higher than during the same week a year earlier and 1.4% above the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have made up for all of last winter’s unusually strong demand.
The EIA\'s next storage report slated for release on Thursday, July 2 is expected to show a build of approximately 70 billion cubic feet for the week ending June 26.
Supplies rose by 102 billion cubic feet in the same week last year, while the five-year average change is an increase of 75 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in August tumbled $1.02, or 1.71%, to trade at $58.64 a barrel, while heating oil for July delivery shed 0.79% to trade at $1.848 per gallon.
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Written By: Investing.com
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