15 December 2013, News Wires – US natural gas futures, pressured by some profit taking, slid about 1% on Friday, but cold, wintry weather led to a near 6% gain for the week, making for a sixth straight weekly rise.
The weekly gain, the biggest in two months, pushed prices to their highest level since May and near the highest in more than two years, Reuters reported.
“It has been a pretty volatile week and there is probably a little bit of profit taking going on here, especially since they weren’t able to push it through the high of the year,” Addison Armstrong, senior director of market research at Tradition Energy, told the news wire.
“But obviously everybody knows it’s cold and everybody knows we’re going to have a record or near-record storage report next week,” Armstrong added.
Front-month January natural gas futures on the New York Mercantile Exchange slid 5.8 cents, or 1.3%, to settle at $4.351 per million British thermal units.
The nearby contract traded as high as $4.443, just one tenth of a cent shy of the high in July 2011.
Some technical traders expected a pullback might be in the offing after the nearly 24% run up in the six weeks since 1 November, the largest six-week gain in eight months.
They noted the 14-day relative strength index, an underlying indicator of market momentum, had climbed into very overbought territory.
In the cash market, gas for delivery through Monday at the Nymex benchmark, Henry Hub in Louisiana, slid 4 cents to $4.35. Late deals also eased to 1 cent under the front-month contract, compared to those done late Thursday at a 3-cent premium.
Gas on the Transco pipeline at the New York citygate , however, rose 50 cents to $7.22 ahead of a winter storm expected this weekend in the Northeast, while Chicago gas slid 3 cents to $4.62.
The latest National Weather Service six- to 10-day outlook issued on Friday called for continued below-normal temperatures across northern-tier states, with above-normal readings expected for the southern half of the country.
The eight- to 14-day outlook called for the colder weather to stretch further south in the mid-Continent, nearing northern Texas.
Thursday’s gas storage report from the US Energy Information Administration showed total inventories fell last week by 81 billion cubic feet to 3.533 trillion cubic feet, leaving stocks more than 7% below last year’s level and about 3% below the five-year average.
Early withdrawal estimates for next week’s gas storage report range from 180 Bcf to 229 Bcf versus a year-ago draw of 70 Bcf and the five-year average drop for that week of 133 Bcf.
The number of rigs drilling for natural gas in the US fell by six this week to 369, data from Baker Hughes showed. The count, however, remains above the 18-year low of 349 hit in late June.