The NYMEX December natural gas futures contract fell 2.3 cents to settle at $2.769/MMBtu Thursday after a government storage report that showed a smaller than expected inventory build failed to stop prices from sliding for a fourth straight day.
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Over the last four trading sessions, the prompt-month contract has shed a combined 33.6 cents. Thursday's settlement price was the lowest the December contract has closed at since reaching $2.768/MMBtu on April 15.
"Cash has been a drag on prices and perhaps that continues but eventually the market will come to grips with the concept of winter and it going to come. Production is down from the end of Oct, as to be expected, and with no severe cold weather in front of us there is little reason for prices to rally," EcomEnergy said in its Daily Call email Friday.
Henry Hub spot prices fell to $2.285/MMBtu on Wednesday, their lowest price since early June, according to S&P Global Platts data. Spot prices made a small rebound Thursday, rising about 7 cents to reach $2.36/MMBtu.
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The latest six- to 10-day outlook from the US National Weather Service, issued Thursday afternoon, was bearish for gas demand as it showed above-average temperatures across almost the entire continental US. The latest forecast showed below-average temperatures shrinking from the Southeast coast to now only cover portions of Florida.
Total US dry gas production is forecast to reach 70.7 Bcf/d over the next seven days, down less than 200 MMcf/d from the prior week, data from Platts Analytics' Bentek Energy showed. The US Energy Information Administration, in its weekly natural gas storage report Thursday morning, showed total inventories rose to 3.963 Tcf in the week that ended October 28, a 54 Bcf build from the prior week. The injection was slightly below the expectations of analysts surveyed by Platts, who were predicting a storage build of 57 Bcf.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
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