Natural Gas Ends Week On A High Note; Russia And Greece Sign Gas Deal

Natural Gas Ends Week on a High Note; Russia and Greece Sign Gas DealThe natural gas price ended last Friday on a high note after a bumpy week. Natural gas for July delivery settled up 3.9 cents, or 1.4 percent, at $2.816 per million British thermal units on the NYMEX. For the week, it rose 6.6 cents, or 2.4 percent, for a second straight week of gains.

US natural gas inventory data dragged the natural gas price down last week, but analysts have pointed to trade activity as one cause of Friday's boost. According to The Wall Street Journal, the rally was likely caused in part by bearish traders getting out of their positions as the weekend approached. Many traders close positions ahead of the weekend, and if those dominating the market hold short positions, prices can end up rising as those trades get closed.

Looking at the bigger pictures, the US Energy Information Administration's (EIA) natural gas weekly update shows that temperatures have been above average in the Eastern US for the past few months, with the northeast seeing its warmest May ever. That's led to higher natural gas consumption, and no doubt has been positive for the fuel's price. Retirements of coal-fired and nuclear power plants have also contributed to higher natural gas consumption in the Eastern US. The closures will likely continue to be a factor moving forward as an additional 32 coal plants are scheduled for retirement this month.

"In 2015, 12.1 gigawatts (GW) of coal-fired capacity is expected to retire because of the implementation of the Environmental Protection Agency's Mercury and Air Toxics Standards. About 4 GW of coal-fired capacity retired in April, although on average this capacity was operating at a below-normal 25% capacity factor," states the EIA.