August 10th ,2012

Natural gas futures tumbled to a one-month low Friday as forecasts showed cooler temperatures ahead that may lower gas usage by power plants.

Natural gas futures for September delivery settled 17.5 cents, or 5.9%, lower at $2.77 a million British thermal units on the New York Mercantile Exchange, after falling as low as $2.76/MMbtu earlier in the session.

Forecaster MDA EarthSat predicted Friday a “stronger shot of cool air” would descend on the Midwest over the next five days, leading to cooler-than-normal temperatures as the end of August approaches.

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February 7th, 2012

Natural gas futures rose Tuesday as the prospect of cooler weather, and increasing gas-fired heating demand, kept prices from turning lower.

Natural gas for March delivery rose 3.4 cents, or 1.3%, higher at $2.584 a million British thermal units on the New York Mercantile Exchange. The benchmark contract had risen as low as $2.618 in earlier trading.

Natural gas futures gained as forecasters are calling for a sustained bout of colder weather across the Northeast U.S., which should result in dropping inventories of gas as more consumers use the fuel for heating.

Commodity Weather Group on Tuesday said cooler-than-normal temperatures are now expected to last into early next week for the U.S. east coast, while the Midwest should stay cooler longer into next week as well.

A relatively mild winter for much of the U.S. has contributed to record inventories of natural gas. Last week, the Energy Department said U.S. stockpiles stood at 2.966 trillion cubic feet, 25% above the five-year average level for this time of year.

“A lack of significant cold is precluding the market from sustaining price rallies,” said Jim Ritterbusch, head of oil-trading advisor Ritterbusch and Associates, in a research report.

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January 23rd, 2012

Natural gas futures, the worst-performing commodity in 2012, rose the most in two years in New York after Chesapeake Energy Corp., the second-largest U.S. producer, said it will cut production and reduce spending.

Natural Gas futures climbed 7.8 percent after Chesapeake said it will “immediately curtail” output of 500 million cubic feet a day and lower planned investment in gas fields by 70 percent from 2011 levels to $900 million. Hedge funds and other large speculators last week cut bets that gas would fall as it traded at its lowest levels since 2002, a government report showed.

On the New York Mercantile Exchange, gas for February delivery rose 18.2 cents to settle at $2.525 per million British thermal units. The percentage increase was biggest since Dec. 10, 2009. The futures are down 16 percent this year.

Gross production at Chesapeake wells will be cut by as much as 1 billion cubic feet a day as gas-well completions are deferred wherever possible, the Oklahoma City-based company said in a statement today. The reduction equals about 1.5 percent of U.S. marketed gas output in 2011, Energy Department data show.

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Published January 19th, 2012

Natural gas futures plunged more than 6% to their lowest level in 10 years Thursday, after a government report showed another week of modest demand for the fuel.

The slide marks the eighth straight session of lower prices for the commodity, triggered by an unusually warm winter that has damped demand for gas-fired home and office heating. With much of winter already over and production still elevated, prices may still have further to fall, analysts said.

“It’s just a giant market capitulation,” said Ben Smith, president of First Enercast Financial, a market data service.

Natural gas futures for February delivery settled 15 cents, or 6.1%, lower at $2.322 a million British thermal units on the New York Mercantile Exchange. That is the lowest finish for natural gas since Feb. 25, 2002.

Thursday’s sell-off came on the heels of a Department of Energy report that said U.S. natural gas inventories fell just 87 billion cubic feet last week, a much smaller than usual decline for this time of year.

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November 16th, 2011

Natural gas futures declined for a fifth day on Tuesday, falling to the lowest level since October 2010 as warm temperatures and concerns about growing U.S. inventory levels continued to weigh on sentiment.

On the New York Mercantile Exchange, natural gas futures for December delivery traded at USD3.442 per million British thermal units during U.S. morning trade, shedding 0.34%.

It earlier fell by as much as 1.05% to trade at USD3.417 per million British thermal units, the lowest price since October 22, 2010.

Since the beginning of November, natural gas futures have fallen nearly 13%, as mild weather in key gas-consuming regions in the U.S. limited early-season heating demand.

The Commodity Weather Group said earlier that the U.S. East Coast was expected to be warmer-than-normal next week. Temperatures in the region could be 3-to-8 degrees Fahrenheit (1.6 to 4.4 Celsius) higher-than-normal, according to the firm’s six-to-ten-day weather outlook.

Natural gas futures prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late October and early November on heating demand.

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November 10th, 2011

Natural-gas futures settled 2.5% lower Wednesday amid continued worries over rising inventories and weak demand.

Weekly gas inventory data, due Thursday, are expected to show stocks rose by higher-than-normal levels, to top the vital 3.8 trillion-cubic-feet level. The Energy Information Administration report, scheduled for 10:30 a.m. EST, will show a inventory rise of 32 billion cubic feet in the week ended Nov. 4, according to analysts surveyed by Dow Jones Newswires.

That would top last year’s increase of 26 bcf and the five-year average rise of 23 bcf. If the forecast is correct, stocks of 3.826 trillion cubic feet would stand just 0.3% below a year ago and top the five-year average by 5.8%.

Kyle Cooper, managing partner at IAF Energy Advisors in Houston, said he expected a “huge” 35 billion-cubic-feet rise. “That’s a large number for this time of year,” he said.

Rising inventory and continued weak demand, in part due to forecasts for lingering above-normal temperatures through the third week of November in the eastern half of the nation, continue to batter prices.

Natural gas futures for December delivery on the New York Mercantile Exchange settled 9.3 cents, or 2.5%, lower, at $3.652 per million British thermal units. The December contract is 27.1 cents, or 6.9%, below its settlement on Oct. 28, when it began trading as the front-month contract.

“If we don’t start getting cold weather, it’s going to really get sloppy,” Cooper said, adding he sees the possibility for gas to slump to the low $3/mmBtu range, last seen in September 2009. In late October, winter-month futures were trading slightly above $4. But at Wednesday’s settlement, futures prices didn’t top the $4 mark until the November 2012 contract.

Near-term oversupply worries won’t fade quickly, the EIA said in its short-term energy outlook released Tuesday.

The EIA’s consumption estimates for fourth-quarter gas demand were revised downward to 69.88 billion cubic feet a day from 70.86 billion cubic feet a day, but were 1.3% above a year ago. The EIA also projects a 12% smaller drop in gas inventories this winter compared with a year ago. End-winter gas inventories are expected to hit a record above 1.8 trillion cubic feet at the end of March, up 14% from a year ago.

FUTURES         SETTLEMENT              NET CHANGE
Nymex Dec       $3.652                   -9.3c
Nymex Jan       $3.749                   -9.4c
Nymex Feb       $3.767                   -9.2c

CASH HUB        RANGE                    PREVIOUS DAY
Henry Hub       $3.44-$3.578             $3.38-$3.485
Transco 65      $3.425-$3.58             $3.41-$3.50
Tex East M3     $3.74-$3.95              $3.68-$3.76
Transco Z6      $3.80-$3.84              $3.70-$3.82
SoCal           $3.70-$3.87              $3.735-$3.79
El Paso Perm    $3.36-$3.485             $3.38-$3.43
El Paso SJ      $3.41-$3.48              $3.37-$3.42
Waha            $3.435-$3.48             $3.30-$3.425
Katy            $3.37-$3.50              $3.375-$3.43

-By David Bird, Dow Jones Newswires.