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Natural gas futures - weekly outlook: October 13 - 17

Published 10/12/2014, 10:03 AM
Updated 10/12/2014, 10:03 AM
Natural gas futures end the week down 4.45%

Natural gas futures end the week down 4.45%

Investing.com - U.S. natural gas futures ended Friday's session close to a one-month low, as market players monitored near-term weather forecasts to gauge the strength of demand for the fuel.

On the New York Mercantile Exchange, natural gas for delivery in November tacked on 1.4 cents, or 0.36%, to settle at $3.859 per million British thermal units by close of trade on Friday.

A day earlier, natural gas prices hit $3.815, a level not seen since September 12, before closing at $3.845, down 1.0 cent, or 0.26%.

Futures were likely to find support at $3.786 per million British thermal units, the low from September 12, and resistance at $3.947, the high from October 8.

On the week, Nymex natural gas prices lost 18.0 cents, or 4.45%, the first weekly decline in three weeks.

Updated weather-forecasting models continued to call for pockets of cool air to trek across the U.S. in the coming days, though temperatures still won't fall too hard to seriously drive demand for heating while staying mild enough to curb the need for air conditioning.

Cooler air systems will see reinforcements, though the intensity of these blasts of falling mercury reading remains up in the air.

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

Meanwhile, investors continued to digest Thursday's weekly inventory data, which showed that natural gas storage in the U.S. rose by 105 billion cubic feet last week.

Inventories rose by 91 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 84 billion cubic feet.

Injections of gas into storage have surpassed the five-year average for 25 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 3.205 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 11% from a record 54.7% at the end of March.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in natural gas futures in the week ending October 7.

Net longs totaled 6,288 contracts, down sharply from net longs of 26,166 in the previous week.

Elsewhere on the Nymex, crude oil for November delivery settled at $85.82 a barrel by close of trade on Friday, down $3.92, or 4.36%, on the week.

Meanwhile, heating oil for November delivery slumped 2.14% on the week to settle at $2.560 per gallon by close of trade Friday.

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