Natural gas climbs to 5-week high on Midwest heat, storm activity
Investing.com
Published Sep 03, 2013 10:45AM ET
Market participants also monitored tropical storm activity in the Gulf of Mexico, amid concerns over a disruption to supplies from the region.
On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD3.668 per million British thermal units during U.S. morning trade, up 2.4%.
Prices rose by as much as 2.8% earlier in the session to hit a daily high of USD3.683 per million British thermal units, the strongest level since July 25.
Nymex floor trading was closed Monday for the Labor Day holiday, and yesterday’s transactions will be booked with today’s trades for settlement purposes.
Updated weather forecasting models pointed to warmer-than-normal temperatures across most parts of the U.S. Midwest through mid-September, boosting near-term demand expectations.
The Commodity Weather Group called for "late-season warmth" over the next two weeks, with above-normal temperatures concentrated in the Midwest and portions of the Northeast.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Prices found additional support after the U.S. National Hurricane Center said earlier that two low-pressure storm systems near the Gulf of Mexico each have a 20% chance of becoming a tropical cyclone.
Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 10% of U.S. natural gas production.
Meanwhile, U.S. supply levels also remained in focus. Total U.S. natural gas storage stood at 3.130 trillion cubic feet as of last week, 1.5% above the five-year average but still 7% below last year's level.
Early injection estimates for this week’s storage data range from 45 billion cubic feet to 53 billion cubic feet, compared to a 33 billion cubic feet increase during the same week a year earlier.
The five-year average for the week is a build of 60 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October rose 0.4% to trade at USD108.07 a barrel, while heating oil for October delivery added 0.3% to trade at USD3.146 per gallon.
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Written By: Investing.com
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