NEW YORK (Dow Jones)--Natural-gas futures fell Wednesday along with other energy commodities amid a glut of natural gas and predictions for another large storage injection.
Natural gas for July delivery on the New York Mercantile Exchange was trading 8.9 cents lower, or 2.29%, at $3.79 a million British thermal units. The contract fell as low as $3.759/MMBtu in earlier trading.
Ample stocks of natural gas were helping mitigate forecasts for hot weather and an expected increase in demand for natural gas-fired power to cool homes and businesses.
"The heat is being somewhat ignored," said Lisa Zembrodt, commodity analyst of Louisville, Ky.,-based Summit Energy. "No matter how you look at it, there's gas out there to meet demand."
Zembrodt added the market is likely to track crude oil and related energy products until the gas market gets some "solid direction" from the storage report on Thursday.
The amount of gas in storage as of June 12 totaled 2.557 trillion cubic feet - about a third higher than last year and 22.6% above the five-year average. Traders are expecting another large injection on Thursday, providing yet another bearish consideration for the market.
The Energy Information Administration is due to release its weekly natural gas storage report at 10:30 a.m. E.T. on Thursday.
Jim Ritterbusch, president of the energy advisory firm Ritterbusch and Associates, is expecting a 100 bcf storage injection. "Although such a build would be downsized considerably from the prior week, we also feel that the psychological impact of a sixth consecutive triple digit storage increase would be considerable," he wrote in a note.
Ritterbusch said that slowing the mounting storage surplus this summer will require some supply disruptions as a result of hurricane activity.
The National Weather Service forecast forecast for June 29 to July 3 calls for warmer-than-normal temperatures across Texas, the Midwest and the Great Plains. Below-normal temperatures are expected in parts of the Northeast.
-By Veronica Dagher and Jason Womack, Dow Jones Newswires; 212-416-2143; veronica. dagher@dowjones.com
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