Investing.com – Natural gas futures declined on Friday, as forecasts for mild weather across key consumption regions of the U.S. in the week ahead dampened demand expectations for the fuel.
On the New York Mercantile Exchange, for delivery in September shed 1.5 cents, or 0.53%, to end the day at $2.798 per million British thermal units.
Despite Friday’s losses, the September natural gas contract rose 7.3 cents, or 3.02%, on the week, the first weekly gain in three weeks, as extreme heat spread across the southern half of the U.S.
Updated weather forecasting models released Friday pointed to cooler weather across the Great Lakes, Northeast and Northwest-regions through August 20.
Losses were limited as forecasts showed that most parts of the central and southern U.S. remained engulfed by hot temperatures.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.
On Thursday, natural gas futures ticked up 1.5 cents, or 0.54%, after data showed that U.S. natural gas supplies rose less than expected last week.
According to the U.S. Energy Information Administration, rose by 32 billion cubic feet last week, below expectations for an increase of 42 billion and following a build of 52 billion cubic feet in the preceding week.
Supplies rose by 83 billion cubic feet in the same week last year, while the five-year average change is an increase of 53 billion cubic feet.
Total U.S. natural gas storage stood at 2.912 trillion cubic feet as of last week, 22.5% higher than during the same week a year earlier and 2.2% above the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have made up for all of last winter’s unusually strong demand.
The EIA’s next storage report slated for release on Thursday, August 13 is expected to show a build of approximately 57 billion cubic feet for the week ending August 7.
Supplies rose by 79 billion cubic feet in the same week last year, while the five-year average change is an increase of 48 billion cubic feet.
Elsewhere on the Nymex, for September delivery settled at $43.87 a barrel by close of trade on Friday, down $2.99, or 6.9%, on the week, while for September delivery dropped 2.85% on the week to settle at $1.543 per gallon.
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