Natural gas went off the board with a six-cent gain after losing 8% related to the expiration of the July contract. Read this NASDAQ article:
NEW YORK--Natural-gas futures snapped a four-day, 8% losing streak Wednesday, amid bargain hunting related to the expiration of the July contract.
The incoming front-month August contract gained as well, but traders said there has been no change in a bearish weather forecast that shows little chances of a jump in gas demand through the first week of July, east of the Rocky Mountains.
Natural gas for July delivery on the New York Mercantile Exchange went off the board with a six-cent gain, to $3.707 million British thermal units, the lowest expiration-day price since February.
The contract had lost 31.6 cents over the prior four days amid forecasts showing that above-normal temperatures in coming weeks will be limited to states west of the Rockies.
The July contract fell to an intraday 15-week low, but found support near the 200-day moving average of $3.63 million British thermal units.
"There seems to be a reluctance to push down toward $3.60, with hurricane season and a lot of the summer still ahead," said Gene McGillian, analyst and broker at Tradition Energy. "We could see a turn in the weather and be right back up to $4."
August gas rose 6.7 cent to settle at $3.737/mmBtu.
Forecasts through the first week of July continue to show moderate-to-cool temperatures east of the Rocky Mountains, stifling demand for gas-fired power to meet air-conditioning demand in the highly populated areas in the region.
As natural-gas production remains steady and inventories are in line with five-year norms, prices are finding little incentive to rally, traders said.
U.S. gas inventories, meanwhile, remain broadly in line with seasonal averages. Last week, the Energy Information Administration reported that gas stockpiles stood at 2.438 trillion cubic feet, just 1.9% below the five-year average level for this time of year.
Analysts surveyed by Dow Jones Newswires expect EIA data due at 10:30 a.m. EDT Thursday to show another outsized increase, of 89 billion cubic feet, compared with the a 58-bcf rise last year and a five-year average rise of 79-bcf rise for the week.
"We've seen above-normal builds in the past eight weeks," said Mr. McGillian, noting that worries about the potential for tight inventories ahead of next winter have been diminished by the gains.
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