Natural gas futures – weekly outlook: April 20 – 24
Natural gas futures climbed to the highest level in more than a week on Friday, before turning lower as investors cashed out of the market to lock in gains from a recent rally.
On the New York Mercantile Exchange, natural gas for delivery in May hit an intraday peak of $2.693 per million British thermal units on Friday, the strongest level since April 7, before closing at $2.634, down 5.0 cents, or 1.86%.
Futures were likely to find support at $2.475 per million British thermal units, the low from April 13, and resistance at $2.709, the high from April 7.
Despite Friday’s decline, the May natural gas contract rallied 14.7 cents, or 4.9%, on the week, amid speculation utilities and power generators will switch from coal to natural gas in wake of the recent slide in prices.
Natural gas prices have been under heavy selling pressure in recent weeks amid speculation the end of the winter heating season will bring warmer temperatures throughout the U.S. and cut into demand for the fuel.
Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.
The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. rose by 63 billion cubic feet last week, above expectations for an increase of 53 billion and following a build of 15 billion cubic feet in the preceding week.
Supplies rose by 22 billion cubic feet in the same week last year, while the five-year average change is an increase of 35 billion cubic feet.
Total U.S. natural gas storage stood at 1.539 trillion cubic feet as of last week, 81.7% above year-ago levels and 8.6% below the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have made up for most of last winter’s unusually strong demand.
The EIA’s next storage report slated for release on Thursday, April 23 is expected to show a build of approximately 80 billion cubic feet for the week ending April 17, which would be the most on record for the week.
Supplies rose by 45 billion cubic feet in the same week last year, while the five-year average change is an increase of 46 billion cubic feet.
Elsewhere on the Nymex, crude oil for May delivery settled at $55.74 a barrel by close of trade on Friday, up $3.93, or 7.94%, on the week, while heating oil for May delivery rallied 6.59% on the week to settle at $1.882 per gallon.
https://www.nasdaq.com/article/natural-gas-futures-weekly-outlook-april-20-24-cm466763
