Posted by: coastlinesproject | July 9, 2013

Natural gas futures lower as it appears Chantal will remain out of the Gulf of Mexico.

UPDATE 3-U.S. natgas futures end lower as weather, storm worries ease

Tue Jul 9, 2013 3:40pm EDT

* Extended weather forecasts moderate slightly

* Storm Chantal seen steering clear of Gulf of Mexico

* Coming Up: Reuters natural gas storage poll on Wednesday (Updates with closing prices, adds analyst quote, EIA production estimate)

By Joe Silha

NEW YORK, July 9 (Reuters) – U.S. natural gas futures ended down sharply on Tuesday, erasing most of the previous session’s gains, as investors shrugged off concerns about a storm in the Caribbean and focused instead on slightly more moderate weather forecasts for the next two weeks.

Traders noted that most computer runs showed Tropical Storm Chantal steering clear of key Gulf of Mexico gas-producing areas, calming fears of possible offshore supply disruptions. The storm was seen heading northwest across the Caribbean and towards Florida and the Bahamas.

“There’s still some heat around, but people are expecting another higher-than-normal (storage) injection this week which is holding the market back,” said Steve Platt, analyst at Archer Financial in Chicago.

Front-month gas futures on the New York Mercantile Exchange ended down 8.4 cents, or 2.2 percent, at $3.657 per million British thermal units, after trading between $3.626 and $3.747.

The nearby contract, which spiked more than 3 percent on Monday amid warm forecasts and storm concerns, hit a 3-1/2 month low of $3.526 about two weeks ago.

The National Weather Service eight- to 14-day forecast called for above-normal temperatures in the West, upper Midwest and Northeast, with normal or below-normal readings expected for the rest of the nation.

Despite lingering heat and humidity early this week, particularly in the Northeast, many traders remain skeptical of any upside in prices, with gas inventories only slightly below average for this time of year and production still flowing at or near a record peak.

Inventory builds have exceeded the five-year average for the last five weeks and some analysts expect that to continue for the next few weeks even if forecasts turn more supportive.

Injection estimates for Thursday’s Energy Information Administration storage report ranged from 75 to 99 billion cubic feet, with most in the low- to mid-80s. That would be well above the 34-bcf build seen during the same week last year and the five-year average rise for that week of 74 bcf.

Despite the drop in dry gas drilling last month to an 18-year low, the EIA still sees output up 1.1 percent from 2012 to a record high 69.96 bcf daily. If realized, it would be the third straight year of record production. (Additional reporting by Eileen Houlihan; Editing by Jeffrey Benkoe, John Wallace, Jim Marshall and Marguerita Choy)


Read more in; Storm Surge; A Coastal Village Battles the Atlantic, Beach Wars; 10,000 Years on a Barrier Beach and The View From Strawberry Hill; Reflections on the Hottest Year on Record. See Strawberry Hill, UPNE, and Schiffer book tabs at the top of this page.




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