US GAS: Futures Fall On Weather, Unemployment Data
11/06/2009 08:18AM
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NEW YORK (Dow Jones)--Natural gas futures slid Friday, pressured lower by mild weather forecasts, abundant inventories and a rising U.S. unemployment figure.
Natural gas for December delivery on the New York Mercantile Exchange was trading 11.9 cents lower, or 2.49%, at $4.663 a million British thermal units after opening floor trade 13.7 cents lower at $4.645/MMBtu.
Gas futures were driven lower Friday by a Labor Department report Friday showing that more jobs were lost in October, sending the unemployment rate to 10.2%, the highest since April 1983. Gas traders have tracked economic data closely for signs of a recovery that could boost energy demand.
"Jobs may not hurt stocks that much, but they surely (affect people's) ability to buy new homes that are heated by gas, and weaker industrial and commercial demand," wrote Drew Wozniak, an analyst with ICAP Energy in Louisville, Ky., in a note to clients Friday.
Forecasts of moderate temperatures in the major gas-consuming regions over the next two weeks were also placing downward pressure on gas prices. The National Weather Service was predicting above-normal temperatures across the eastern two-thirds of the U.S. from Nov. 9 to Nov. 13, with significantly warmer-than-normal temperatures in the northern Midwest. For Nov. 13 to Nov. 19, NWS was forecasting above-normal temperatures across the Midwest and Northeast.
"For all the talk of this being a colder winter than last year's, we haven't really seen any evidence of it yet," said Mike Fitzpatrick, a broker with MF Global in New York.
Meanwhile, gas supplies remain ample. Total gas in storage as of Oct. 30 was 3.788 trillion cubic feet, 12.3% above the five-year average and 11.1% above last year's level. Unusually cold winter weather or a sharp uptick in economic activity will be needed to put a significant dent in inventories, according to analysts and traders.
-By Christine Buurma, Dow Jones Newswires; 212-416-2143; christine.buurma@dowjones.com