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Natural gas futures - weekly outlook: April 7 - 11

Published 04/06/2014, 10:49 AM
Updated 04/06/2014, 10:49 AM
Natural gas futures end the week with a loss of 1%

Investing.com - U.S. natural gas futures edged lower on Friday, after updated long-term weather-forecasting models called for milder temperatures across most parts of the U.S.

On the New York Mercantile Exchange, natural gas for delivery in May lost 0.69%, or 3.1 cents, to settle at $4.439 per million British thermal units by close of trade on Friday.

Natural gas fell to an 11-week low of $4.221 per million British thermal units on April 2.

Futures were likely to find support at $4.221 per million British thermal units, the low from April 2 and resistance at $4.483, the high from April 3.

On the week, Nymex natural gas prices slumped 1.02%, or 4.6 cents amid concerns that the arrival of spring will bring warmer temperatures throughout the U.S. and cut into demand for heating.

Updated long-term weather forecasts called for gradual warm-up over the Mid-Continent during the next 15 days, likely reducing demand for the fuel.

Spring and fall see the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Natural gas rallied 2.4% on Thursday after weekly supply data showed that natural gas storage in the U.S. fell by 74 billion cubic feet, much higher than the five-year average drop of 8 billion cubic feet for this time of year.

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Total U.S. natural gas storage stood at 822 billion cubic feet, the lowest for this time of year since 2003.

Utilities withdrew a record 3.012 trillion cubic feet of gas from storage since the start of the heating season in November. Many analysts expect this to be the last weekly withdrawal as the winter heating season draws to a close.

Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers significantly reduced their bullish bets in natural gas futures in the week ending April 1.

Net longs totaled 101,385 contracts, down 17.2% from net longs of 122,419 in the previous week.

Elsewhere in the energy complex, U.S. crude oil for May delivery settled at $101.14 a barrel by close of trade on Friday, down 0.52%, or 52 cents, on the week.

Meanwhile, heating oil for May delivery lost 1.35% on the week to settle at $2.907 per gallon by close of trade Friday.

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