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Natural gas futures - weekly outlook: August 18 - 22

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Investing.com -

Investing.com - U.S. natural gas futures lost more than 3% on Friday, as a break in a U.S. heat wave prompted traders to head for the exits.

On the New York Mercantile Exchange, natural gas for delivery in September plunged 3.33%, or 13.0 cents, to settle at $3.776 per million British thermal units by close of trade on Friday. Prices hit $3.763 earlier, the lowest since August 4.

Futures were likely to find support at $3.761 per million British thermal units, the low from August 4 and resistance at $3.947, the high from August 14.

On the week, Nymex natural gas prices slumped 4.69%, or 18.6 cents, the biggest weekly loss in a month.

Updated weather-forecasting models predicted cooler-than normal weather over the next week or so, before warmer weather moves in across much of the Central part of the country over the subsequent six-to-10-days.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.

Natural gas futures rallied almost 2% on Thursday after the U.S. Energy Information Administration said that natural gas storage in the U.S. rose by 78 billion cubic feet last week, below expectations for an increase of 83 billion cubic feet.

Inventories rose by 70 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 45 billion cubic feet.

Injections of gas into storage have surpassed the five-year average for 17 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 2.467 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 18.9% from 20.3% a week earlier and down from a record 54.7% at the end of March.

The EIA's next storage report is slated for release on Thursday, August 21, with analysts expecting a build of 82 billion cubic feet for the week ending August 15.

Inventories rose by 58 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 48 billion cubic feet.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers significantly increased their bullish bets in natural gas futures in the week ending August 12.

Net longs totaled 2,897 contracts, up 53% from net longs of 1,362 in the previous week.

Elsewhere on the Nymex, crude oil for September delivery settled at $97.35 a barrel by close of trade on Friday, down 0.3%, or 30 cents, on the week.

Meanwhile, heating oil for September delivery slumped 1.07% on the week to settle at $2.841 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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