NATURAL GAS SETTLES DOWN 2.6% AMID ONGOING MILD DEMAND

Economic Barometer , Energy , Energy , Natural Gas , Negotiating with Suppliers , NEGOTIATOR'S TAKE , Plastics , propylene Feb 24, 2016 No Comments

 

NEGOTIATOR’S TAKE:  Prices for plastic components made from Polyethylene or Polypropylene should be dropping.

 

02.20.16 – Warmer-than-average Winter

Natural-gas prices fell to a fresh two-month low last Friday on expectations of continued mild demand.

A warmer-than-average winter in the eastern half of the U.S. has limited demand for natural gas as an indoor-heating fuel, pushing more gas into storage and weighing on prices.  As of Feb. 12, stockpiles of natural gas stood 26% above the five-year average for this time of year, the Energy Information Administration said Thursday.  Temperatures aren’t expected to turn much colder in the next two weeks, according to forecasts, and traders are already looking to spring when demand for the fuel will fall further.

“The demand landscape is troubling,” said Aaron Calder, analyst at energy-advisory firm Gelber & Associates, in a note.

 

imagesNatural Gas storage in Houston, TX

 

Lowest level since December 18, 2015

Natural gas futures for March delivery settled down 4.8 cents, or 2.6%, at $1.804 a million British thermal units on the New York Mercantile Exchange, the lowest level since Dec. 18.  Prices fell 8.2% on the week, the third straight weekly decline.

Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $1.785/mmBtu, compared with Thursday’s range of $1.85-$1.885. Cash prices at the Transco Z6 hub in New York last traded at $1.75/mmBtu, compared with Thursday’s range of $1.96-$1.99.

 

SOURCE: Wall Street Journal

ARTICLE AUTHOR: Nicole Friedman | Follow Nicole on TWITTER | Email Nicole at: nicole.friedman@wsj.com

 

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