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Natural gas futures - weekly outlook: Nov. 4 - 8

By: Investing.com
Posted: 11/3/2013 10:40:00 AM
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Investing.com - " Natural gas futures tumbled nearly 2% on Friday to hit a four-week low, as market participants continued to focus on weather forecasts to gauge the strength of demand for the fuel.

On the New York Mercantile Exchange, natural gas futures for delivery in December dropped 1.9% on Friday to settle the week at USD3.513 per million British thermal units.

Earlier in the day, Nymex gas prices fell to a session low of USD3.508, the weakest level since October 4.

The December contract settled down 1.08% on Thursday to end at USD3.581 per million British thermal units.

Nymex gas futures were likely to find support at USD3.482 per million British thermal units, the low from October 4 and resistance at USD3.660, the high from October 30.

On the week, December natural gas prices plunged 7.03%, the biggest weekly decline in two months.

Weather-forecasting models continued to predict that currently cool temperatures in the Midwest and Eastern U.S. will give way to largely mild temperatures over the next six-to-ten days.

Weather-forecasting models continued to predict that currently cool temperatures in the Midwest and Eastern U.S. will give way to largely mild temperatures over the next six-to-ten days.

Bearish speculators are betting on the warm weather reducing early-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.

Meanwhile, U.S. supply levels also remained in focus. The U.S. Energy Information Administration said on Thursday that natural gas storage in the U.S. rose by 38 billion cubic feet.

Inventories rose by 66 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 57 billion cubic feet.

Total U.S. natural gas storage stood at 3.779 trillion cubic feet as last week, 3.1% below last year's unusually high level but 1.6% above the five-year average for this time of year.

Early injection estimates for this week's storage data range from 33 billion cubic feet to 45 billion cubic feet, compared to a 27 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 36 billion cubic feet.

Elsewhere in the energy complex, light sweet crude oil futures for December delivery settled at USD94.61 a barrel by close of trade on Friday, dropping 3.31% on the week.

Meanwhile, heating oil for December delivery shed 0.85% on the week to settle at USD2.883 per gallon by close of trade Friday.

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