Natural-gas futures prices fell for a fourth straight day Friday, as mild weather curbed demand in a market pressured by high output and ample inventories.
For the third day in a row, front-month futures settled at the lowest level since Oct. 27. Doubts about a pick-up in the U.S. economy also weigh on prices, as industrial demand accounts for nearly one-third of consumption.
Barring an unexpected turn in forecasts for mild temperatures through early October or the conjuring of a late-season hurricane threatening U.S. Gulf production facilities, traders said October-delivery natural gas is expected to limp into a weak expiration next Wednesday.
October delivery natural gas futures on the New York Mercantile Exchange settled 0.4 cent lower Friday at $3.701 per million British thermal units. The contract traded in a range of $3.699 to $3.741/mmBtu. The price was down 10.8 cents, or 2.8% from a week ago, while intraday prices moved in a near 44-cent range since early last week.
Pax Saunders, an analyst at Gelber & Associates in Houston said that after prices moved below $3.70 this week, he's ratcheted down his forecast for a trading range of $3.50 to $3.70 through mid-October.
The Energy Information Administration's survey, released Thursday, showed natural gas inventories rose by 89 billion cubic feet during the week ended Sept. 16. Analysts had expected a 91-bcf injection, according to a Dow Jones Newswires survey.
Saunders said he expects gas-injection levels to be higher than normal in the next couple of weeks, keeping pressure on prices. After that, autumn and winter demand should kick in to lift prices.
"The window is tightening for a run lower, but that doesn't mean we're bullish," he said. Saunders sees "no steam" for prices to top the early August level of $4.15 in coming weeks.