Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Natural gas weakens on warm weather, inventory levels

CommoditiesSep 24, 2012 04:05PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items - Natural gas futures traded lower during U.S. afternoon trade Monday, as warm weather forecasts worked with the overextended inventory levels to create a bearish environment for the commodity.

On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD3.046 per million British thermal units during U.S. afternoon trade, dropping 0.81%.       

It earlier fell by as much as 2.9% to trade at a session low of USD2.812 per million British thermal units.

The October contract is due to expire at the end of trading on Wednesday, September 26. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.

Meanwhile, the more actively traded contract for November delivery fell 1.1% to trade at USD3.038 per million British thermal units. The November contract tumbled by as much as 2.3% earlier to trade at a daily low of USD3.001.

Updated weather forecasts predicted normal or above-normal temperatures for most of the country into early October, dampening early-Autumn demand.

The Commodity Weather Group said earlier that warmer-than-normal temperatures are expected across the Midwest and East Coast over the next two weeks, keeping demand for heating "relatively low" for this time of year.

Natural gas demand typically rises in the summer as air-conditioning use boosts utility demand, then sinks in the fall as demand weakens ahead of the peak winter heating season. 

Ongoing concerns over bloated U.S. inventory levels also added to the selling pressure.

The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 67 billion cubic feet, just above market expectations for an increase of 64 billion cubic feet.

Last year, stocks rose by 89 billion cubic feet, while the average rise in the week over the previous five years was 73 billion cubic feet.

Total U.S. gas supplies stood at 3.469 trillion cubic feet, 10% above last year’s level and 9% above the five-year average level for the week.

Inventories did not top the 3.4-trillion cubic feet level in 2011 until October 5, with stocks peaking at a record 3.852 trillion cubic feet in November of last year.

Market analysts have warned that without strong demand through the rest of the summer cooling season, gas inventories will reach the limits of available capacity later this year. 

Early injection estimates for this week’s storage data range from 69 billion cubic feet to 83 billion cubic feet, compared to last year's build of 104 billion cubic feet. The five-year average change for the week is an increase of 76 billion cubic feet.

A bout of extreme heat across much of the U.S. earlier in the summer helped boost natural gas prices above the key USD3.00-level in late-July. Prices rallied to a 2012 high of USD3.275 per million British thermal units on July 31.

But futures have come under heavy selling pressure since the start of August, after extended weather forecasts pointed to milder weather across most parts of the U.S.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in November sank 0.97% to trade at USD91.98 a barrel.

Natural gas weakens on warm weather, inventory levels

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email