Shutterstock photo
Markets

Natural gas futures - Weekly review: May 2-6

Shutterstock photo

Shutterstock photo

Forex Pros - Last week saw natural gas prices retreat from a 14-week high, posting its biggest weekly decline since August as a sharp selloff in crude oil and concerns over rising U.S. supplies weighed on prices.

On the New York Mercantile Exchange, natural gas futures for delivery in June settled at USD4.269 per million British thermal units by close of trade on Friday, plunging 9.2% over the week.

The death of Osama bin Laden on Monday was the catalyst for a broad selloff in commodities, which continued after the European Central Bank indicated on Thursday that interest rates could remain on hold next month. Oil prices tumbled 13.5%, the biggest weekly decline since December 2008.

On Thursday, natural gas prices tumbled 7.5% after government data showed that U.S. natural gas stockpiles rose by 72 billion cubic feet in the week ended April 29, surpassing expectations for a 68 billion cubic feet increase.

Total U.S. natural gas storage stood at 1.757 trillion cubic feet. Stocks were 226 billion cubic feet less than last year at this time and 17 billion cubic feet below the five-year average of 1.774 trillion cubic feet.

Natural gas futures remained under pressure on Friday after industry research group Baker Hughes said that the number of active rigs drilling for natural gas in the U.S. rose for the second consecutive week, climbing to 890 from 882.

According to the group, a drop to the 800-to-850 rig range would be necessary to begin to balance the market.

Forecasts of mild spring weather also weighed after the Commodity Weather Group said on Friday that it expected mostly normal temperatures in the eastern and central U.S. states from May 11 to May 15, reducing demand for gas for heating and cooling purposes.

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.

Meanwhile, light sweet crude oil futures for June delivery traded at three-month low of USD98.11 a barrel by close of trade on Friday, plunging 13.5% over the week, while heating oil for June delivery traded at USD2.866 per gallon, tumbling 12.3% over the week.

Forex News

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.

Other Topics

ForEx

Latest Markets Videos