TRD: U.S. GAS : Futures Down Slightly; Weather Forecasts Weigh
--Natural gas futures fall 1.6 cent to $2.858/MMBtu
--Traders keep watch on next week's weather forecasts
--Some forecasters see earlier cooling in some parts of U.S.
By Jerry A. DiColo
NEW YORK--Natural gas futures fell Friday, retreating as traders focus on U.S. storage levels and look to weather forecasts for signals on when the latest period of hot temperatures may subside.
Natural gas for August delivery fell 2.3 cents, or 0.8%, to recently trade at $2.851 a million British thermal units on the New York Mercantile Exchange.
Commodity Weather Group said Friday hot weather will peak across the Midwest Tuesday and along the East Coast Wednesday, but added that cooler weather should arrive more quickly in the East than previously forecast.
Over the next 11 to 15 days, the West Coast is expected to cool down along with some parts of Texas.
Warmer-than-normal temperatures typically raise natural gas prices, as they increase demand for the fuel from gas-fired utilities.
Over the past several weeks, hot weather has led to smaller increases in U.S. gas inventories than is normal for this time of year, lowering concerns that a glut formed last winter will reach total U.S. storage capacity later this year.
"Injections have underperformed throughout the entire injection season, but must continue to underperform for the rest of the injection season...or the industry will hit storage capacity limitations," said Dominick Chirichella, an analyst at the Energy Management Institute, in a client note.
On Thursday, the U.S. Energy Information Administration said 33 billion cubic feet of natural gas were injected into storage last week. While above analysts' estimates, the injection was well below the 90-bcf average injection for this time of year.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $2.89/MMBtu, according to IntercontinentalExchange, compared with Thursday's average of $2.8277/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $3.14/MMBtu, up from $3.0903/MMBtu.
