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Natural gas prices fall on mild U.S. weather forecasts

Published 05/16/2014, 01:14 PM
Updated 05/16/2014, 01:19 PM
Natural gas dips on mild weather forecasts

Investing.com - Natural gas prices fell on Friday after updated weather-forecasting models called for mild temperatures across much of the U.S., which should curb demand for both heating and air conditioning.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at $4.443 per million British thermal units during U.S. trading, down 0.59%. The commodity hit session high of $4.458 and a low of $4.418.

The June contract settled up 2.34% on Thursday to end at $4.469 per million British thermal units.

Natural gas futures were likely to find support at $4.222 per million British thermal units, the low from April 2, and resistance at $4.508 Thursday's high.

Mild springtime temperatures should hover over most of the heavily populated East Coast next week, which should prompt households to throttle back on heating and air conditioning.

The high for New York City will reach 73 Fahrenheit on Sunday and 68 on Monday.

Elsewhere, investors continued to digest Thursday's supply report.

The Energy Information Administration said that U.S. Natural Gas Storage rose by 105 billion cubic feet in the week ending May 9, up from 74 billion cubic feet in the preceding month.

Analysts had expected U.S. Natural Gas Storage to rise 99 billion cubic feet last week.

Prices rose initially on the news, as analysts viewed the build as small.

U.S. stockpiles need to fill by November at the start of the heating season, which means quantities going into to storage must rise, as the possibilities of a winter storage still remain.

Stockpiles are 40% below their level this time last year and 45% below the five-year average.

Producers would need to add 2.6 trillion to 2.9 trillion cubic feet to storage by November 1 to meet typical winter demand.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June were up 0.64% at $102.15 a barrel, while heating oil for June delivery were up 0.30% at $2.9594 per gallon.

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