NYMEX November natural gas futures contract weakened in morning trading Friday, on offsetting movements in heating and cooling demand.
As of 11:30 pm EDT (1530 GMT), the front-month contract was trading at $3.149/MMBtu, down 1.6 cents, after moving between $3.124/MMBtu and $3.224/MMBtu so far in the session.
"East has a warm start to fall," said Elaine Levin, president of PowerHouse Brokerage noting that the price slide could be a result of the depressed demand across much of the Eastern US.
Total US gas burns for power is set to decline by 2.8 Bcf on day and stand at 31.2 Bcf/d likely due to a mild temperatures, according to S&P Global Platts Analytics. Power burn is estimated to drop and average over the next eight to 14 days as cooling demand continues to decrease.
The declines in power burn are offset by gains in heating demand across much of the Northern and Western parts of the country. Residential and commercial demand is estimated to stand at 16.1 Bcf/d Friday, up 3 Bcf on day.
Heating demand is likely to climb up and estimated to average 19.9 Bcf/d over the next eight to 14 days, with the National Weather Service calling for a likelihood of cooler-than average temperatures across much of these regions.
"Storage build have taken some of the wind out of the sail," Levine said. The surprisingly large injection of 98 Bcf to the US gas stocks announced Thursday, by the US Energy Information Administration, resulting in a bearish sentiment in the market, he added.
Current gas sits at 2.866 Tcf, down 17.5% from the five-year levels of 3.473 Tcf, based on EIA data.
After a long consolidation period, the market finally was able to break out a long established trading range of $2.75/MMBtu and $3.08/MMBtu in the week.
The prompt-month contract hit a high of $3.23/MMBtu Wednesday, hitting a high of. The contract was last seen at this level on January 17.