Natural gas drops as June contract expires, weather forecasts weigh
Published May 29, 2013 12:53PM ET
Weather forecasts and uncertainty over supply data due out this week kept prices lower as well.
In the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD4.140 per million British thermal units, down 2.00%.
The commodity hit a session low of USD4.119 and a high of USD4.229.
Expiring futures contracts often lead to volatile sessions as market participants look to close out positions or reposition portfolios.
Contradicting weather forecasts fueled the selloff as well.
Forecasts for above-normal temperatures failed to send prices rising as weather models called for below-normal temperatures returning to parts of the eastern U.S.
Hotter temperatures send prices rising on sentiments that demand for natural gas will increase at the country's thermal power plants as businesses and households crank up their air conditioning units.
Cooler temperatures this time of year send prices falling.
Investors kept a cautious eye towards Thursday’s closely-watched U.S. supply data to gauge the strength of demand from U.S. households.
Early injection estimates range from 80 billion cubic feet to 103 billion cubic feet, compared to a 72 billion cubic feet increase during the same week a year earlier.
The five-year average for the week is a build of 92 billion cubic feet.
Total U.S. natural gas storage stood at 2.053 trillion cubic feet as of last week, 3.9% below the five-year average for this time of year.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July were down 1.63% and trading at USD93.46 a barrel, while heating oil futures for July delivery were down 1.18% at USD2.8697 per gallon.
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Written By: Investing.com
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