After 12 straight weeks of above-average natural gas storage gains, prices are slipping along with concern about possible shortages this winter.
Despite the gains, however, the country is still expected to begin the winter with storage levels lower than in recent history, according to a report by the U.S. Energy Information Administration.
Like many natural gas price trends, the current decline is fueled largely by weather, Oklahoma City natural gas price marketer and producer Tony Say said.
“Demand is down a bit mainly due to weather,” said Say, president of Oklahoma City-based Clearwater Energy. “We’ve had a very mild summer throughout the central and eastern part of the country, which has led to record storage injections.”
A strong cold front forecast for much of the country over the next week is expected to further drive up storage and drive down prices.
The price of natural gas closed at $4.15 Monday on the New York Mercantile Exchange. The price was unchanged on the day, but down from $4.71 on June 16.
Some hedge funds appear to be among the natural gas price bears. Funds reduced their net-long positions 8.1 percent last week, according to the U.S. Commodity Futures trading Commission.
The country’s storage levels rose 93 billion cubic feet last week to 2.022 trillion cubic feet as of July 4, according to the EIA. Despite the gain, storage levels remained more than 24 percent below year-ago levels and almost 28 percent below the five-year average.
Continue reading this story on the...