US natural gas futures down

US natural gas futures fell 1 percent on Friday and ended the week 2 percent lower, pressured by above-average storage builds, moderate weather forecasts and the lowest next-day prices in New York in almost two years. In New York, next-day gas fell for a seventh straight day, down 15 cents to average $2.98 per million British thermal units, the lowest since September 2012.
Front-month natural gas futures on the New York Mercantile Exchange closed down 5.6 cents, or down 1.3 percent, at $4.413 per mmBtu. The June NYMEX contract traded between $4.42 and $4.46 per mmBtu, according to Reuters data. The front-month is down about 8 percent since the start of the month but still up about 5 percent for the year.
Analysts expect utilities to add between 88 and 116 billion cubic feet of gas into storage this week, with an early average of about 100 bcf. That is well above the 90 bcf year ago and five-year average. Last week, utilities added 97 bcf of gas into storage (excluding 8 bcf of base gas reclassified as working gas), which was slightly below the Reuters poll of 99 bcf and the year ago of 98 bcf, but well over the 82 bcf five year average.
Gas in storage now stands at 1.160 trillion cubic feet, still an 11-year low for this time of year. MDA Weather Services forecast cooler air would move from the Mid-Continent to the East over the next five days, before the Midwest and Southeast turn mild over the next six to 10 days.
Over the next two weeks, US weather models forecast slightly warmer than normal weather with 90 cooling degree days, above the normal of 85. Heating degree days are only expected to reach 42, well below the normal 54, according to Thomson Reuters Analytics. The premium of the NYMEX front-month gas contract over the front-month Appalachian coal contract eased to $1.79 per mmBtu from $1.83 Thursday, according to Reuters data. Traders consider a gas premium of $2 over coal as wide enough to offset the cost of coal transportation and the higher efficiency of gas plants. Next-day gas at the Henry Hub, the benchmark US supply point in Louisiana, gained 8 cents to average $4.43 per mmBtu on the IntercontinentalExchange. Next-day gas in Chicago meanwhile lost 4 cents to average $4.47 per mmBtu, the lowest since mid January, while the PG&E citygate gained 3 cents to $4.94.