Futures Pros – Natural gas futures erased gains on Monday, as investors cashed out of the market to take advantage of a rally that took prices to a seven-week peak.
On the New York Mercantile Exchange, natural gas futures for May delivery traded at USD4.481 per million British thermal units during U.S. morning trade, shedding 0.68%
Earlier in the day, natural gas futures rose to USD4.557, the highest price since February 3, amid indications of increased demand after forecasts for colder than average temperatures in the U.S. next week.
However, the rally prompted some investors to sell their position on profit taking and lock in gains on speculation that the market's recent rally had accounted for the boost to heating needs.
Meanwhile, industry group Baker Hughes said on Friday that the number of active rigs drilling for natural gas in the U.S. in the week ended March 18 rose for the first time in four weeks, increasing by 0.6% to 880 rigs, up from 875 rigs the previous week.
According to the group, a drop to the 800-to-850 rig range would be necessary to begin to balance the market.
The U.S. Energy Information Administration said last week that total U.S. natural gas storage in the week ended March 18 stood at 1.612 trillion cubic feet. Stocks were 12 billion cubic feet lower than last year at this time and 34 billion cubic feet above the five-year average of 1.578 trillion cubic feet.
