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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Big Dog who wrote (35683)	10/12/2004 2:16:30 PM
From: profile_14	Respond to of 206327

Natural-Gas Futures Slide, Pressured by Lower Wholesale Prices 2004-10-12 12:42 (New York) Natural-Gas Futures Slide, Pressured by Lower Wholesale Prices By Jim Kennett Oct. 12 (Bloomberg) -- Natural-gas futures fell for a third session, narrowing the price spread with supplies for next-day delivery amid signs of ample storage before winter. Traders in regional markets were reluctant to follow a 50 percent rally in futures from mid-September to early October. U.S. gas inventories that are about 7 percent above normal levels helped keep gas at the Henry Hub in Louisiana more than $1 cheaper than November futures, six times the normal spread. ``It's been one of the great mysteries, how long these prices could hold up with cash as soft as it is,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons Inc. in St. Louis. ``There're really no significant storage problems.'' Gas for November delivery fell 20.3 cents, or 2.9 percent, to $6.79 per million British thermal units at 12:23 p.m. on the New York Mercantile Exchange. The contract is down 6.4 percent since Oct. 7. Year to date, gas has averaged about $5.86 per million Btu, the highest for the period since futures began trading in 1990. Gas for next-day delivery at the Henry Hub yesterday traded at $5.63 per million Btu on the Intercontinental Exchange, an electronic energy market run from Atlanta. The price was more than a dollar cheaper than Nymex gas for November delivery for seven straight sessions through yesterday. The average spread is 18.4 cents, according to Bloomberg data. Nymex gas is delivered at the Henry Hub after a contract expires, often forcing prices at the two points to come together. The spread between November and January futures was about $1.70 per million Btu, almost double the three-month average. The spread between the contracts a year earlier was about 54 cents. High Inventories Inventories stood at 3.092 trillion cubic feet the week ended Oct. 1, according to the U.S. Energy Department. With four weeks left until the traditional start of the heating season on Nov. 1, utilities need to store 27 billion cubic feet a week to reach the 3.2 trillion cubic-foot level considered by many analysts to be adequate for winter needs. Inventories probably rose by 70 billion cubic feet last week, the median estimate of 10 analysts polled by Bloomberg. That compares with 56 billion on average for the week over the previous five years, and 77 billion a year earlier. The estimate from Bloomberg inventory surveys has been within an average 4.3 billion cubic feet of the actual storage number for the past 10 weeks. Temperatures in the U.S. were 14 percent above normal last week, according to figures weighted for gas-furnace use from the National Oceanic and Atmospheric Administration. Prices from late September into last week rose on concern that cuts in Gulf of Mexico gas production caused by damage from Hurricane Ivan would crimp supplies. Daily output from the region, source of a quarter of U.S. production, was down by 1.78 billion cubic feet at the end of last week, or 14 percent. Inventories nationwide rose by 81 billion cubic feet last week, 27 percent more than normal. ``Traders have to wrestle soon with the fact that storage is so high,'' said Guy Gleichmann, president of UnitedStrategic Investors Group, a commodity brokerage in Hollywood, Florida. ``Even if they bring all this stuff back online from Ivan, they don't have anyplace to put it.'' --Editors: Banker. Story illustration: To graph the front-month Nymex contract, see {NG1 <Cmdty> GP D <GO>}. For a slide show of natural-gas data, see {CNP 09101550204 <GO>}. Press the space bar to pause the tour and <GO> to resume. To contact the reporter on this story: Jim Kennett in Houston at (1) (713) 353-4871 or jkennett@bloomberg.net To contact the editor of this story: Robert Dieterich at (1) (212) 893-4485 or rdieterich@Bloomberg.net. [TAGINFO] NGUSHHUB <Index> NI GAS NI US NI CMD NI NRG NI GASMARKET NI TOP NI NY NI FUTURES #<580021.910155># #<705506.27849># #<580021.910155># #<705506.27849># -0- Oct/12/2004 16:42 GMT