Natural gas prices drop on profit taking, cool weather forecasts
Published Aug 23, 2013 12:39PM ET
Prices also fell as investors priced in currently hot summer weather into trading and prepared for waning demand that comes with cooler fall temperatures.
On the New York Mercantile Exchange, natural gas futures for delivery in September traded at USD3.489 per million British thermal units during U.S. afternoon trading, down 1.59%. The September contract settled up 2.46% at USD3.545 per million British thermal units on Thursday.
The commodity hit a session low of USD3.484 and a high of USD3.560.
The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ending Aug. 16 rose by 57 billion cubic feet, well below market expectations for an increase of 69 billion cubic feet, which sent prices gaining to levels ripe for profit taking on Friday.
Inventories increased by 43 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 56 billion cubic feet.
Total U.S. natural gas storage stood at 3.063 trillion cubic feet as of last week. Stocks were 238 billion cubic feet less than last year at this time and 44 billion cubic feet above the five-year average of 3.019 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 103 billion cubic feet below the five-year average, following net injections of 47 billion cubic feet.
Stocks in the Producing Region were 88 billion cubic feet above the five-year average of 969 billion cubic feet after a net injection of 4 billion cubic feet.
Updated weather forecasting models meanwhile called for normal to below-normal temperatures for much of the country with the arrival of September, which should dampen demand for natural gas at the country's thermal electricity generators as homes and businesses power down their air conditioning.
Pockets of hot weather will stick around over the central U.S. in early September, which curbed the commodity's losses.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were up 1.62% and trading at USD106.73 a barrel, while heating oil for September delivery were up 1.02% and trading at USD3.1011 per gallon.
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Written By: Investing.com
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