US natural gas futures ended down 5 percent on Friday on profit taking after as forecasts for less frigid temperatures spurred some traders to cash in on gains made earlier in the week. Front-month gas futures on the New York Mercantile Exchange closed down 22.3 cents at $4.266 per million British thermal units. The front-month has been on a roller-coaster ride for the past few weeks - up 14 percent two weeks ago, down 9 percent last week and up 6 percent this week - due primarily to changes in the 15-day weather forecast, exacerbated by technical trade.
The latest US weather models showed continued cold but less arctic weather over the next two weeks in the lower 48 states, with 354 heating degree days, down from 359 forecast on Thursday. That was still above normal HDDs of 341 for this time of year, according to Thomson Reuters Analytics. Gas production in the lower 48 states held at a forecast 69.2 billion cubic feet per day, the same as on Thursday, according to Thomson Reuters Analytics. Production peaked at 70.8 bcfd in August.
Consumption, meanwhile, was expected to fall to 83.9 bcfd on Friday and to 67.9 bcfd on Monday from 86.6 bcfd on Thursday. The front-month futures contract was up 10 percent for the month, the most since January, and up 1 percent for the year to date. In technical trade, the front-month closed below the 200-day moving average, and the 14-day moving average was close to crossing over the 200-day for the first time since July. In early estimates, analysts forecast utilities withdrew a whopping 130 billion cubic feet of gas from storage this week, the most for the week since 2000.