U.S. natural gas futures decline as forecasts turn cooler
Investing.com – U.S. prices declined on Tuesday, as forecasts for mild weather across key consumption regions of the U.S. in the week ahead dampened demand expectations for the fuel.
Natural gas for delivery in September on the New York Mercantile Exchange shed 2.6 cents, or 0.91%, to trade at $2.816 per million British thermal units during U.S. morning hours.
A day earlier, natural gas prices tacked on 4.4 cents, or 1.57%, to close at $2.842 as most parts of the central and southern U.S. remained engulfed by hot temperatures.
Updated weather forecasting models released earlier pointed to cooler weather across the Great Lakes, Northeast and Northwest-regions through August 20.
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.
According to the U.S. Energy Information Administration, 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.
Data last week showed that in the U.S. rose by 32 billion cubic feet, 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.
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 delivery in September tumbled $1.69, or 3.76%, to trade at $43.27 a barrel, while for September delivery sank 2.47% to trade at $1.552 per gallon.
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