Natural-gas prices at six-month low; oil Up and Down

Jul 12, 2014 0 Comments in Oil and Gas News by

SAN FRANCISCO (MarketWatch) — Natural-gas futures edged lower for a second straight session on Tuesday, with prices holding ground at their lowest level since January as traders bet on continued increases in U.S. supplies.

Oil futures traded mostly lower with Libya expected to soon ramp up oil exports and no sign of production disruptions in Iraq.

August natural gas /quotes/zigman/2308008/delayed NGQ14 +0.51%  fell nearly 7 cents, or 1.6%, to $4.16 per million British thermal units. Tracking the most-active contracts, prices haven’t closed at a level this low since Jan. 10. Prices tumbled more than 4% on Monday.

Bloomberg News

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Below-normal temperatures across the upper-Midwest next week are “spreading like an inkblot towards the coasts on the 8-14 day outlook,” said Matt Schneider, a commodity analyst at Schneider Electric, in a note. “This points towards further decimation of the [supply] deficits in the coming weeks in terms of storage, hence natural gas is back at the bottom of this year’s range, testing six-month lows.”

Oil prices fall below key levels

Meanwhile, crude futures continue to give back the premium built in after fighting between Sunni insurgents and the Iraqi government broke out in June. Oil had jumped to nine-month highs on fears the violence could disrupt Iraq’s 2.5 million barrel-a-day export flow. Those concerns have faded on expectations Iraq’s key southern oil fields and facilities will remain insulated from the turmoil.

August crude /quotes/zigman/2196851/delayed CLQ4 -2.37%  fell 18 cents, or 0.2%, to $103.35 a barrel on the New York Mercantile Exchange. August Brent crude /quotes/zigman/2648929/delayed UK:LCOQ4 -1.97%  lost 62 cents, or 0.6%, to $109.62 a barrel on the ICE Futures exchange.

The expected and long-delayed return of two Libyan oil ports is also expected to maintain pressure on oil prices.

On Nymex, petroleum products traded lower as well, with August gasoline /quotes/zigman/5926402/delayed RBQ4 -1.49%  at $2.98 a gallon, down a penny and August heating oil /quotes/zigman/9821453/delayed HOQ4 -0.35%  down nearly 2 cents at $2.90 a gallon.

The U.S. market awaits the usual weekly reports on petroleum supplies, due late Tuesday from the American Petroleum Institute and early Wednesday from the Energy Information Administration.

Analysts polled by Platts are looking for a decline of 3 million barrels in crude supplies, a fall of 1 million barrels in gasoline stockpiles and an increase of 1.2 million barrels for distillates, which include heating oil.

Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.William L. Watts is MarketWatch’s senior markets writer, based in New York. Follow him on Twitter @wlwatts.

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