U.S. natural gas futures rebound after last week's slide
NEW YORK, April 29 (Reuters) - U.S. natural gas futures rebounded early Monday after losing ground last week, underpinned by expectations for another light weekly inventory build and warm weather in the Midwest early this week that should stir some air conditioning demand. Cold late-winter weather, a chilly spring and above-average nuclear plant outages put a huge dent in record gas inventories and helped drive up gas price expectations. "Overnight, natural gas futures advanced slightly ... as expectations for a third consecutive below-average storage injection that further tightens the supply outlook provides a boost to the market," Addison Armstrong at Tradition Energy said in a morning report. Gas prices, pressured by technical selling after nine straight weekly gains, slid nearly 6 percent last week as new longs in the market opted to take profits ahead of milder weather expected in May that should translate into lower demand. Traders also noted that gas prices over $4 were likely to slow demand by prompting more utilities to use coal rather than gas to generate power and increase supply by encouraging producers to turn on more wells. At 9:20 a.m. EDT (1320 GMT), the new front-month June gas contract on the New York Mercantile Exchange was up 9.6 cents, or 2.3 percent, at $4.319 per million British thermal units after trading between $4.225 and $4.329. The front contract, which hit a 21-month high of $4.429 on April 18, last week posted its first weekly decline in 10 weeks. The slide broke trendline and moving average support, but most chart traders were not ready to call an end to the bull market, which began in mid-February and had driven futures up some 40 percent. Most were waiting to see if the new front contract can hold above $4 as milder spring temperatures arrive. While Commodity Weather Group expects the Midwest and South to cool again later this week, the forecaster said the East Coast should continue to see low demand, with no significant warming or cooling loads expected for the next two weeks.
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