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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December 9th, 2011

Natural gas futures sold off sharply Friday, as traders focused on elevated U.S. gas supplies and the likelihood that they will stay that way through the winter.

Natural gas futures for January delivery settled down 14 cents, or 4.1%, to $3.317 a million British thermal units on the New York Mercantile Exchange.

The settlement was the lowest since Nov. 18, when front-month futures sank to a one-year low of $3.316/MMBtu.

The decline has erased all of the previous day’s gains, which were spurred by a government report showing a bigger-than-expected draw in natural gas inventories last week. Traders initially took the Department of Energy report as a sign of improving demand for gas-fired heating.

But the draw was well below what is normally expected this time of year, and on Friday traders came to the conclusion that future declines this winter are likely to remain small due to the mild temperatures expected across much of the country, said Pax Saunders, analyst at Gelber & Associates.

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