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NYMEX: US natural gas falls on high supply, mild weather

07 May 2012 10:06:07 | lmd

Henry Hub futures on the NYMEX slid by 7%, ending the week less than a cent below where trading first began on Monday.

The front month settled at $2.28/MMBtu, down by 6 cents from the previous day. Trading faltered at the start of the session, reversing Thursday's rebound on supply expectations.

The June '12 contract stayed in negative territory for the rest of the day.

The US Energy Information Administration's (EIA) supply report on Thursday showed a smaller-than-expected surplus, which carried the day's rally, but traders on Friday were back to constrained expectations. Production figures shown in drilling surveys reflected 1-2% declines for gas-directed rigs for the week ended 4 May, which could ease the supply surplus.

This slackened the 2012 average to $2.60/MMBtu, and edged down the 2013 calendar average to $3.47/MMBtu.

Warmer temperatures may increase cooling demand for the southwest and state of California, but mild weather is predicted for the remainder of the US, according to meteorological firm MDA EarthSat.

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