NYMEX December natural gas futures settled down 4.1 cents to $2.257/MMBtu on Thursday as the December contract failed to close in positive territory after a bullish storage report.
US gas in storage increased 63 Bcf to 3.877 Tcf for the week that ended October 23, the US Energy Information Administration said Thursday.
The net injection was below consensus expectations of an injection between 66 Bcf and 70 Bcf. EIA in the corresponding week last year reported an 88-Bcf injection, while the five-year average is a 73-Bcf injection.
The initial response from the market was strong, as the market traded as much as 7.4 cents higher to $2.372/MMBtu. As the trading day progressed, mild weather forecasts and a robust production outlook moved the contract back into negative territory.
Pushing the contract lower were WSI's six- to 10-day and eight- to 14-day outlooks, updated Thursday, that both call for above-average temperatures in the eastern half of the US, with especially warm weather in the Northeast, Mid-Atlantic and Upper Midwest.
Below-normal temperatures are expected in the Rockies and inland portions of the Southwest.
The mild weather is expected to dampen US demand. Platts data shows US demand averaging 66.2 Bcf/d over the next seven days, a 4.1 Bcf/d decline from Thursday.
After reaching 70.8 Bcf/d on Thursday, Platts data shows US production is forecast to average 71.4 Bcf/d over the next seven days and then rise to 71.6 Bcf/d the following seven days.
The December contract traded in a range of $2.235/MMBtu and $2.372/MMBtu Thursday.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
