Natural gas prices inch higher as demand concerns ease
Natural gas futures prices settled higher Wednesday, rebounding after a report on U.S. gas stockpiles met analyst forecasts.
Prices of gas have direct impact on Nigeria, which is the largest shareholder in the Nigerian Natural Liquefied Gas (NNLG).
Natural gas for August delivery on the New York Mercantile Exchange settled 3.6 cents, or 1%, higher, at $3.690 a million British thermal units after trading as low as $3.573/MMBtu earlier in the session.
The U.S. Energy Information Administration said 72 billion cubic feet of gas was injected into storage in the week ended Friday. The data was only slightly above analysts’ average estimate of a 70-bcf injection, according to a Dow Jones Newswires survey, though some investors and analysts had feared a sharper increase was possible.
Stockpiles have increased by more than forecast in six of the past eight weeks.
Natural-gas futures have wavered close to three-month lows as cooler-than-normal temperatures cut into fuel demand. But analysts and traders said demand doesn’t appear weak enough to send prices significantly lower.
“I’m a little bit surprised it’s moved higher, but we’ve had so much selling over the past couple weeks and the market doesn’t look ready to break to $3.50,” said Kent Bayazitoglu, an energy analyst at Gelber and Associates in Houston.
This time last year, just 41-bcf of gas was injected, though the five-year average build is 71 bcf.
Inventories as of Friday totaled 2.605 trillion cubic feet, 1.1% below the five-year average and 16% below last year’s level.
Still, price gains were kept in check by weather forecasts Wednesday that pointed to a cooler outlook for much of the U.S. over the next several days.
Private forecasters WSI Energycast said it expects “a period of near-seasonable to colder-than-average temperatures over the central U.S. and southeast” regions, which are important drivers of gas demand.
Natural gas is often used by utilities to generate electricity. When temperatures fall, fewer homes and businesses need power for air conditioning.
re> re>FUTURES SETTLEMENT NET CHANGE re>Nymex August $3.690 +3.6c re>Nymex September $3.689 +3.8c re>Nymex October $3.703 +3.7c re> re>CASH HUB RANGE PREVIOUS DAY re>Henry Hub $3.47-$3.56 $3.54-$3.60 re>Transco 65 $3.40-$3.48 $3.47-$3.555 re>Tex East M3 $3.34-$3.55 $3.42-$3.59 re>Transco Z6 $3.50-$3.70 $3.66-$3.80 re>SoCal $3.63-$3.86 $3.68-$3.96 re>El Paso Perm $3.3375-$3.41 $3.43-$3.4975 re>El Paso SJ $3.33-$3.39 $3.40-$3.4675 re>Waha $3.38-$3.47 $3.48-$3.50 re>Katy $3.45-$3.50 $3.50-$3.55 re> Meanwhile, the House of Representative Committee on Information and National Orientation has blamed the Federal Ministry of Finance for poor budgetary allocation to Ministries, Departments and Agencies, (MDAs).
House Committee Chairman, Information and National Orientation, Honourable Umar Buba Jubrin while on an oversight function to the National Orientation Agency, (NOA) in Abuja yesterday, said the failure of the Finance Minister, Ngozi Okonjo Iweala to yield to the request of the legislatures caused the poor budgetary allocation to MDAs.
Jubrin described the situation where NOA staff are not being paid their salaries adequately according to appropriation as unfortunate and unacceptable, noting that this was capable of demotivating the staff.
He appealed to the Ministry of Finance to release appropriated funds to all Ministries, Departments and Agencies without further delay to enable the implementation of the 2013 budget as the third quarter of the year is already on course.