U.S. natural gas futures capped the first weekly loss of the month, lacking enough “oomph” to prolong a rally as demand plunged amid mild spring weather and robust production.
Weather forecasts turned warmer overnight, with above-normal temperatures in the Midwest through most of the East Coast for April 20-29, according to Commodity Weather Group LLC. Total U.S. gas demand was down 13 percent to 62.68 billion cubic feet Friday from a week ago, data from PointLogic Energy showed.
Gas futures, which rallied from a 17-year low in early March, have lost momentum this month. Prices have been trapped within a narrow 19-cent range after swinging in a range of 88.4 cents during the first three months of the year. The warmest U.S. winter on record curtailed demand, expanding a stockpile glut while production from shale basins filled storage caverns.
“April and May are the shoulder months when we don’t expect a lot of weather activity, and we aren’t getting it,” said Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami. “We are range-bound. There’s just not enough oomph in this market to push it out of this range.”
Natural gas for May delivery fell 6.8 cents, or 3.5 percent, to $1.902 per million British thermal units on the New York Mercantile Exchange, the lowest settlement since March 28. The futures slid 4.4 percent this week.