Last update: Mon, 08 Feb 2016 07pm
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US spot gas prices drop again on milder weather, holiday

gasNEW YORK: US spot natural gas prices fell across the board on Friday, following through on Thursday's losses as near-term milder weather and the Thanksgiving holiday were expected to dampen heating demand.


Temperatures were seen mostly above normal for most of the nation for the next 10 days, with much-above-normal readings forecast for the Midwest next week, MDA EarthSat forecasters said on Friday. East Coast and Gulf Coast weather was expected to remain seasonal.


Gas for delivery through Monday at the benchmark supply point Henry Hub in Louisiana, fell 17 cents to $3.46 per million British thermal units after losing 3 cents on Thursday.


The Henry Hub differential was nearly unchanged at 18 cents under the New York Mercantile Exchange front-month futures contract late on Friday, compared with 19 cents under late Thursday.


Nuclear outages totaled about 25,000 megawatts, or 25 percent of US capacity, up from 16,000 MW out a year ago and a five-year outage rate of about 19,000 MW. Nuclear outages affect gas prices because gas is used as a substitute for power generation when nuclear plants go down.


NYMEX December gas futures ended 8.7 cents higher on Friday at $3.790 per million British thermal units. Futures hit their highest level in over a year earlier this week as cold weather crept across the nation, increasing the prospect of gas-powered heating demand.


In major consuming markets, cash gas on the Transco pipeline at the New York citygate lost 22 cents on average to $3.76. Chicago gas also lost 22 cents, falling to $3.60.


The number of rigs drilling for natural gas in the United States climbed slightly this week for the second time in three weeks, raising expectations that recent gains in gas prices to 2012 highs might be tempting some producers to bring on more supply.


The gas-directed rig count rose this week by four to 417 after posting a 13-year low the previous week, data from Houston-based oil services firm Baker Hughes showed.


Copyright Reuters, 2012