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Natural gas futures - Weekly outlook: March 25 - 29

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Investing.com - Natural gas futures ended Friday's session little changed below the previous session's 18-month high, as market players were hesitant to extend a recent rally amid bearish chart signals.

On the New York Mercantile Exchange, natural gas futures for delivery in April eased up 0.15% Friday to settle at USD3.933 per million British thermal units by close of trade.

On Thursday, Nymex gas prices rose to USD4.021 per million British thermal units, the strongest level since September 15, 2011, before turning lower as a bout of technical selling set in after prices were met with strong resistance above the USD4.00-level.

On the week, natural gas prices rallied 1.85%, the fifth consecutive weekly advance.

Natural gas prices have risen sharply in recent weeks. The heating fuel is up almost 21% since falling close to a four-month low of USD3.125 per million British thermal units on February 15, boosted by calls for colder temperatures in major consuming regions across the U.S.

Natural gas prices have closely tracked shifting weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on late-winter heating demand.

On Thursday, natural gas futures broke above the key USD4.00-per-million-British-thermal-units for the first time in 18 months after a U.S. government report showed natural gas supplies fell more than the five-year average last week.

The U.S. Energy Information Administration said that natural gas storage in the U.S. in the week ended March 15 fell by 62 billion cubic feet.

Inventory withdrawals were flat in the same week a year earlier, while the five-year average change for the week is a decline of 26 billion cubic feet.

Total U.S. natural gas storage stood at 1.876 trillion cubic feet as of last week, 21.5% below their level this time last year, but still 9.5% above the five-year average.

Early withdrawal estimates for this week's storage data range from 59 billion cubic feet to 94 billion cubic feet.

Inventories rose by 45 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a buildup of 6 billion cubic feet.

Sentiment on the heating fuel remained upbeat after updated weather forecasts continued to call for below-normal readings for most of the Eastern half of the U.S. in the next six-to-ten days.

Bullish speculators are betting on the cool weather increasing late-winter demand for the heating fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption. Nearly 50% of all U.S. households use gas for heating.

Elsewhere in the energy complex, light sweet crude oil futures for May delivery settled at USD93.86 a barrel by close of trade on Friday, adding 0.3% on the week.

Meanwhile, heating oil for April delivery rose 0.85% over the week to settle at USD2.972 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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