Friday 26 August 2016

Natural gas extends win streak; oil futures bounce

Natural-gas futures settled higher Thursday, to tally a fourth straight win, buoyed by a smaller-than-expected weekly climb in U.S. supplies as warmer weather lifted domestic demand prospects for the fuel.
Crude-oil futures, meanwhile, recouped some of the 2.8% loss they suffered a day earlier in the wake of a larger-than-expected increase in U.S. crude inventories.
September natural gas NGU16, -0.42%  rose 5 cents, or 1.8%, to settle at $2.846 per million British thermal units on the New York Mercantile Exchange. That marks the ninth winning session out of the last 10. Prices are roughly 11% higher for the week so far, lifting the year-to-date climb to 23%.
“Power burn was strong again last week, especially throughout the entire section east of the Appalachians, including Florida,” said Richard Hastings, macro strategist at Seaport Global Securities. “The big Northeast heat waves are going to resume, and more heat waves will follow” if a potential storm comes into Florida early next week, he said.
The U.S. Energy Information Administration early Thursday reported that supplies of the commodity rose 11 billion cubic feet for the week ended August 19. That was slightly below the average rise of 18 billion cubic feet expected by analysts polled by S&P Global Platts.
But “a small figure was largely priced in throughout the week and heading into the report, with several of the most recent estimates even seeing a single-digit as a possibility,” Joseph George, commodity analyst at Schneider Electric, told MarketWatch.
“Strong production figures are weighing on the market as well, and holding off an additional rally on top of what we’ve seen in recent days,” he said. “Even though temperatures are expected to remain warm over the next two weeks, continually elevated supply relative to recent months is helping to counter the additional demand.”
Oil bounce
Meanwhile, crude-oil futures Thursday finished higher, shrinking their week-to-date decline to roughly 3.4%.
October West Texas Intermediate crude CLV6, -0.02%  added 56 cents, or 1.2%, to settle at $47.33 a barrel on Nymex. October Brent crude on London’s ICE Futures exchange LCOV6, -0.26%  finished up 62 cents, or 1.3%, to $49.67 a barrel.
Traders bought dollar-denominated oil “as the U.S. dollar index DXY, -0.13%  didn’t get much of a bounce off bullish weekly jobless claims and July durable goods” released early Thursday, said Darin Newsom, DTN senior analyst. The markets were also waiting for clues on the Federal Reserve’s plan for interest rates from Fed Chairwoman Janet Yellen’s speech Friday at the Jackson Hole, Wyo. symposium.





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