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Sep 05, 2010
US GAS: Futures End Lower As Market Eyes Spring, Ample SuppliesFeb 08, 2010
By Jason Womack
Of DOW JONES NEWSWIRES
HOUSTON (Dow Jones)--Natural gas futures reversed earlier gains and ended lower Monday as traders weighed forecasts for cold weather in coming weeks against the approach of spring and ample inventories of the fuel.
Natural gas for March delivery on the New York Mercantile Exchange settled down 11.4 cents, or 2.07%, at $5.401 per million British thermal units. The front-month contract climbed as high as $5.68/MMBtu in earlier trading.
Forecasts continue to call for cold weather across much of the country for the next two weeks, but those forecasts will exert less influence on prices as spring approaches and temperatures turn milder.
"We have this tug of war between the bears and the bulls right now," said Pax Saunders, an analyst with Houston-based Gelber & Associates.
The National Weather Service is forecasting below-normal temperatures across most of the U.S. from Feb. 15 to Feb. 21 - including key natural gas demand centers in the Northeast and the Midwest. Cold temperatures are also expected across the Southeast, the Mid-Atlantic and in Texas over that same period.
Frigid temperatures can boost demand for natural gas to heat homes and business. This demand would in turn draw down robust levels of the fuel in storage. U.S. gas inventories for the week ended Jan. 29 stood at 2.406 trillion cubic feet - 9% higher than last year and 6.6% above the five-year average.
Mike Fitzpatrick, an analyst with MF Global in New York, wrote in a note to clients Monday that the weather forecasts will help keep prices supported, but with stockpiles more full than average this late in the season, "a wildly rallying market is not likely."
Storage levels swelled last year as natural gas producers continued to unlock vast new supplies of the fuel from rapidly developing gas fields known as shales. At the same time, the economic downturn undermined gas demand, particularly from industry. High levels of gas in storage have helped ease concerns over short-lived demand spikes.
FUTURES SETTLEMENT NET CHANGE
Nymex Mar $5.401 -11.4c
Nymex Apr $5.371 -11.2c
Nymex May $5.428 -10.7c
CASH HUB RANGE PREVIOUS DAY
Henry Hub $5.68-$5.77 $5.55-$5.68
Transco 65 $5.70-$5.80 $5.56-$5.66
Tex East M3 $6.38-$7.60 $8.05-$9.60
Transco Z6 $7.00-$9.75 $9.20-$14.00
SoCal $5.70-$5.80 $5.60-$5.70
El Paso Perm $5.49-$5.62 $5.40-$5.50
El Paso SJ $5.45-$5.65 $5.38-$5.45
Waha $5.62-$5.75 $5.46-$5.54
Katy $5.61-$5.70 $5.50-$5.57
-By Jason Womack, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com [back] |
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