US natgas futures close above $3 for first time in 7 months

20 July 2012 20:56  [Source: ICIS news]

HOUSTON (ICIS)--US natural gas futures broke through the $3.00/MMBtu barrier during pre-weekend trading for the first time since January.  

The August Henry Hub benchmark on the NYMEX finished at $3.081/MMBtu, up 8.2 cents from the previous session.

Production spurred by unconventional drilling has created a glut in supply, and alongside an unseasonably warm winter, natural gas futures have stayed firmly under $3.00/MMBtu for most of 2012.

The last settlement above the $3.00/MMBtu mark was 9 January at the settled price of $3.011/MMBtu.

Traders were testing above the dollar mark during Thursday’s intraday trading, but the settlement landed at $2.999/MMBtu.

During Friday morning, trading appeared choppy on the front-month contract, as weather forecasts have maintained triple-digit temperatures in the midwest, supporting power demand.

Temperatures in June contributed to record levels for the first half of the year and the warmest 12-month period since recordkeeping began in 1895, according to the US National Oceanic and Atmospheric Administration.

In addition, a series of unexpected outages at nuclear power plants this week contributed to a rise in demand for natural gas. As of Friday, six nuclear power units out of 104 units were off line, according to the US Nuclear Regulatory Committee.

By: Ruth Liao
+1 713 525 2637

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