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Natural gas futures - Weekly outlook: April 8 - 12

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Investing.com - Natural gas futures ended Friday's session at a 20-month high, as sentiment on the commodity was boosted amid receding concerns over U.S. inventory levels.

On the New York Mercantile Exchange, natural gas futures for delivery in May soared 4.95% Friday to settle the week at USD4.142 per million British thermal units by close of trade.

Earlier in the day, Nymex gas prices rose to USD4.145 per million British thermal units, the strongest level since August 3, 2011.

On the week, natural gas prices rallied 4.5%, the seventh consecutive weekly advance.

On Thursday, the U.S. Energy Information Administration said that natural gas storage fell by 94 billion cubic feet last week, above expectations for a drop of 91 billion cubic feet.

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 4 billion cubic feet.

Total U.S. natural gas storage stood at 1.687 trillion cubic feet as of last week, 32% lower than last year at this time and 2.1% below the five-year average for this time of year. Gas inventories had held above the five-year average since September 2011.

Early withdrawal estimates for this week's storage data range from 20 billion cubic feet to 36 billion cubic feet. Inventories rose by 11 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 15 billion cubic feet.

Prices found further support after industry weather group MDA Federal predicted cold weather in the Northeast and unusually cold weather in parts of the Midwest in the coming week.

Natural-gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late-winter heating demand and early-spring cooling needs.

Nymex gas prices have risen sharply in recent months, gaining almost 20% since the start of 2013, boosted by calls for colder temperatures in major consuming regions across the U.S. that helped tighten the market.

Wall Street investment bank Goldman Sachs said Friday that it expected natural gas prices to average USD4.50 per million British thermal units in the second half of 2013, citing increasing U.S. demand and lower production levels.

Still, some analysts have warned that further gains may be limited with spring's low-demand shoulder season looming.

Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.

Elsewhere in the energy complex, light sweet crude oil futures for May delivery settled at USD93.02 a barrel by close of trade on Friday, losing 4.3% on the week.

Meanwhile, heating oil for May delivery dropped 4.1% over the week to settle at USD2.923 per gallon by close of trade Friday.

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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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