LONDON (Commodity Online): Natural Gas prices softened further ahead of the weekend as the gas-directed rig count continues to climb. The prompt contract tumbled, down by 8 cents and finished at $3.67/MMBtu, the lowest level of the year.
Calendar 2012 edged lower by 4 cents to $4.24. The weather outlook remains relatively unchanged with the East still looking quite cool for the next five days. Both Orphelia and Phillippe have decided not to venture into the US with little hope for supply disruptions to give any upside momentum for gas prices.
Baker Hughes gas-directed rig count for the week jumped up by 11 rigs to 923. Clearly, producers are not going to let up their gas drilling activities any time soon.
Even though production should continue to grow at the current rig count, in our view, the swelling number of drilled but uncompleted wells will most likely continue to decelerate production growth.
Cash prices fell across the board with Henry Hub down by 9 cents to $3.68, while SoCal Border dropped by 20 cents to $3.76. Transco Zone-6 NY came off 13 cents to $3.83.
