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Natural gas futures - weekly outlook: April 13 - 17

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Investing.com -

Investing.com - Natural gas futures fell to the lowest level in almost three years on Friday, amid speculation the end of the winter heating season will bring warmer temperatures throughout the U.S. and cut into demand for the fuel.

On the New York Mercantile Exchange, natural gas for delivery in May hit an intraday low of $2.504 per million British thermal units on Friday, the weakest level since June 2012, before closing at $2.511, down 1.7 cents, or 0.67%.

Futures were likely to find support at $2.459 per million British thermal units, the low from June 18, 2012, and resistance at $2.646, the high from April 9.

On Thursday, prices plunged 9.1 cents, or 3.47%, after the U.S. Energy Information Administration said that natural gas storage in the U.S. rose by 15 billion cubic feet last week, compared to expectations for a gain of 11 billion and following a withdrawal of 18 billion cubic feet in the preceding week.

Supplies fell by 8 billion cubic feet in the same week last year, while the five-year average change is a decline of 2 billion cubic feet.

Total U.S. natural gas storage stood at 1.476 trillion cubic feet as of last week, 79% above year-ago levels and 10.5% below 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 most of last winter's unusually strong demand.

For the week, the May natural gas contract plunged 20.2 cents, or 7.45%.

Prices are likely to test new lows in the week ahead as the coldest part of the winter has effectively passed and below-normal temperatures in April mean less than they do in January and February.

Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.

Meanwhile, the Energy Information Administration's next storage report slated for release on Thursday, April 16 is expected to show a build of approximately 26 billion cubic feet for the week ending April 10.

Supplies rose by 22 billion cubic feet in the same week last year, while the five-year average change is an increase of 35 billion cubic feet.

Elsewhere on the Nymex, crude oil for May delivery settled at $51.64 a barrel by close of trade on Friday, up $2.50, or 5.09%, on the week, while heating oil for May delivery rallied 4.97% on the week to settle at $1.766 per gallon.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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