Thursday, December 07, 2006 12:57:55 PM
Natural-gas futures fall to a 10-week low
Crude futures edge up as traders await next week's OPEC meeting
By Myra P. Saefong, MarketWatch
Last Update: 12:33 PM ET Dec 7, 2006
SAN FRANCISCO (MarketWatch) -- Natural-gas futures fell to their lowest level in 10 weeks Thursday after a government report showed that supplies of the fuel fell generally within market expectations, but overall inventories remained more than 7% above that of a year ago.
January natural-gas futures were down 10.7 cents to $7.62 per million British thermal units on the New York Mercantile Exchange after a low of $7.57, the contract's weakest intraday level since Sept. 28.
On Wednesday, the price fell to a low of $7.60, but recovered to post a gain and halt a four-session losing streak.
Natural-gas inventories fell 11 billion cubic feet for the week ended Dec. 1, the Energy Department reported Thursday.
Global Insight was looking for a bigger decline of 25 billion. But Analysts at Strategic Energy & Economic Research expected the report to show a decline of 8 billion cubic feet.
The data compares with a fall of 58 billion last year and a five-year average decline of 63 billion, according to SEER.
"This is a very light draw from storage for this time of year, and is a direct reflection of how light weather-driven demand has been this fall and early winter," said Ben Smith, a managing partner at First Enercast Financial.
"At least the reduction in natural-gas price this week shows the market is finally responding to all this warm weather we've experienced over the past month," he said, noting that "even this last winter storm that swept the Midwest was quick and is again being replaced with warmer than average temperatures."
Total stocks now stand at 3.406 trillion cubic feet, up 232 billion cubic feet from the year-ago level, and 282 billion cubic feet above the five-year average, the government data said.
"The only support for gas is the anticipation for next weeks' numbers, which should be more normal because of the cold front that moved through the U.S," said James Williams, an economist at WTRG Economics.
But "weather forecasts for the next few weeks are for warmer-than-normal temperatures, which should feed a generally bearish sentiment," he said.
Any posts are just an opinion and should not be taken as investment advice. Always do your own DD
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