Natural gas futures settled at their highest level in a week on Monday as traders bet that weather will provide a boost in demand to reduce record inventory levels of the fuel ahead of the peak winter heating season, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, December natural gas rallied by 13 cents, or 5%, to settle at $2.749 per million British thermal units. The settlement was the highest for the December contract since November 7.
Prices fell by nearly 5.3% last week following the Energy Information Administration’s report on Thursday that domestic natural gas supplies climbed to a record 4.017 trillion cubic feet for the week ending November 4.
Meanwhile, crude oil futures lost more ground on Monday despite cutting most of their earlier losses in the day.
December West Texas Intermediate crude fell by 9 cents, or 0.2%, to settle at $43.32 a barrel on the New York Mercantile Exchange after falling to a low of $42.20 a barrel. The settlement was the lowest since September 19.
On the London ICE Futures Exchange, January Brent crude, the global benchmark, lost 32 cents, or 0.7%, to end trading at $44.43 a barrel, marking a three-month low.
Crude prices have retreated for weeks before the November 30 OPEC meeting, as traders cast serious doubts over OPEC’s ability to strike a production output deal.
“The cartel really needs to show that the time of tinkering has to come to an end and show a united front, or live with the consequences that OPEC no longer has any power in controlling the oil supply,” said Naeem Aslam, chief market analyst at ThinkMarkets. “Iran and Iraq are both producing record amounts of oil and there is no sign that they are going to respect any quota system.
Monthly data released by the EIA revealed that oil output from seven major U.S. shale plays is forecast to decline by 20,000 barrels a day to 4.498 million barrels a day in December from November.
