On September 13, 2016, U.S. natural gas futures dropped, spinning lower after approaching a two month peak during predictions for warmer than normal temperatures through most parts of the continental U.S. in the days onward and on Wednesday, gas futures increased to an over two month peak of $2.978.
Demand for natural gas has a tendency to to increase in the summer months as warmer temperatures surge the need for gas fired electricity to power air conditioning.
Temporarily, market participants looked forward to weekly supply data scheduled on Thursday, which is anticipated to show a build of about 66 billion cubic feet in the week ended September 9.
On Thursday morning, U.S. natural gas futures cut losses, after data presented that natural gas supplies in storage in the U.S. increase less than the prediction the previous week.
Delivery of Natural gas in October on the New York Mercantile Exchange shed 1.1 cents, or 0.38 percent, to trade at $2.878 per million British thermal units by 10:33AM ET (14:33GMT). Futures were at approximately $2.838 prior to the release of the supply data.
In its weekly report, the U.S. Energy Information Administration stated that natural gas storage in the U.S. increase by 62 billion cubic feet during the week ended September 9, below anticipation for an increase of 63 billion.
In comparison with an increase of 36 billion cubic feet in the preceding week, 74 billion a year before and a five year average build about 69 billion cubic feet.
Total U.S. natural gas storage surge at 3.499 trillion cubic feet, 5.3% higher than levels at this time a year before and 8.6% beyond the five year average for this time of year.
In spite of the recent increase, gains are likely to stay limited, as traders respond to the reality that the higher summer demand for the commodity will be over soon.
Demand for natural gas has a tendency to to increase in the summer months as warmer temperatures upsurge the need for gas fired electricity to power air conditioning.
However, with autumn about to start on September 22, power burns to feed air conditioning demand have perhaps peaked for now.
Except intense late summer heat increases demand from power plants, supplies could probably test physical storage limits of 4.3 trillion cubic feet at the end of October.
On Additional News
On Friday, Oil prices decline on fears that U.S. rig counts would continue to increase and that returning Libyan and Nigerian exports would strengthen a global supply surplus.
Brent crude futures were trading at $46.20 per barrel at 0643 GMT, down 39 cents, or 0.8%, from their last settlement. U.S. West Texas Intermediate futures declined 36 cents, or 0.8 %, at $43.55 a barrel.
Baker Hughes U.S. rig count data for the week to Sept. 16 is scheduled on Friday. West Texas Intermediate prices that have held beyond $40 a barrel since the beginning of August have supported the development in the number of U.S. rigs.
U.S. drillers put additional seven oil rigs in the week to Sept. 9, bringing the total rig count to 414, the most since February.
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