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NYMEX December gas falls 22.3 cents to close at $4.266/MMBtu

http://www.chemnet.com   Nov 24,2014 Platts
The NYMEX December natural gas futures contract fell 22.3 cents to settle at $4.266/MMBtu on Friday, as the market looked to a weekend warming trend and erased much of the week's gains.

The contract had risen a combined 24.5 cents Wednesday and Thursday, as a polar air mass lingered over eastern consuming markets.

But a warming trend expected this weekend and some profit-taking took the air out of that two-day rally, analysts said.

Much of the selloff on Friday occurred in early morning trading, and was based on those near-term forecasts, noted Gene McGillian, senior analyst at Tradition Energy.

"The weather forecasts are not extreme enough to justify $4.50 natural gas pricing in the current bearish fundamental climate, and traders are taking advantage of [Thursday's] steep rally," Aaron Calder, senior market analyst at Gelber & Associates, said.

In addition, WSI's latest 11- to 15-day outlook is calling for below-normal temperatures to be confined to an area east of Illinois and Mississippi through December 5, with average or above-average temperatures expected elsewhere.

"It seems pretty clear that without a forecast for sustained cold weather and with the amount of gas coming out of the ground," a rally won't be supported for long, McGillian said.

"But we still have the entire winter in front of us. If the longer term forecast turns colder again on Monday and we get a big withdrawal as many expect next week, that could provide some support," he said.

Volatility could also dominate the market next week, McGillian said, given the short week for cash traders, the prompt-month expiration on Tuesday and the government storage report coming out a day early on Wednesday ahead of the US Thanksgiving holiday.

"With supply no longer a major market concern (thanks to prolific shale gas development that shows no signs of abating), extreme weather conditions are required to push prices out of their current 'normal-range doldrums,'" said Teri Viswanath, analyst at BNP Paribas.

December traded Friday in a range of $4.258-4.532/MMBtu.

The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2400 GMT).
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