Natural gas futures slump to 8-month low on weak demand outlook
Investing.com
Published Jul 22, 2014 10:09AM ET
Natural gas futures trade at 8-month low on cool summer weather
Investing.com - U.S. natural gas futures traded at the lowest level since November on Tuesday, as demand for the fuel was likely to remain limited after meteorologists predicted mild summer weather in much of the U.S.
On the New York Mercantile Exchange, natural gas for delivery in August fell to a session low of $3.798 per million British thermal units, the weakest level since November 26, before coming off the lows to last trade at $3.819, down 0.78%, or 3.0 cents.
Natural gas futures ended Monday’s session down 2.58%, or 10.2 cents, to settle at $3.849.
Futures were likely to find support at $3.741 per million British thermal units, the low from November 26 and resistance at $3.893, the high from July 21.
Natural gas prices have been under heavy selling pressure in recent sessions after updated weather-forecasting models called for mostly average temperatures across most parts of the heavily-populated Midwest and Northeast regions over the next ten days.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Meanwhile, the U.S. Energy Information Administration said in its weekly report on July 17 that natural gas storage in the U.S. rose by 107 billion cubic feet last week, above expectations for an increase of 98 billion cubic feet. The five-year average change for the week is an increase of 65 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 13 consecutive weeks.
Total U.S. natural gas storage stood at 2.129 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 25.5%, down from a record 54.7% at the end of March.
The EIA's next storage report is slated for release at 10:30 a.m. EDT on Thursday.
Elsewhere on the Nymex, U.S. crude oil for delivery in September eased down 0.2%, or 21 cents, to trade at $102.65 a barrel, while heating oil for August delivery tacked on 0.43% to trade at $2.871 per gallon.
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Written By: Investing.com
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