Natural gas holds near 15-week low as weather outlook weighs

Investing.com - Natural gas futures edged mildly higher on Wednesday, but still remained near a 15-week low amid ongoing expectations for reduced demand after forecasts showed mild weather in the Northeastern U.S. states next week.

Traders also looked ahead to Thursday’s closely-watched U.S. supply data to gauge the strength of demand from U.S. households.

On the New York Mercantile Exchange, natural gas futures for delivery in August traded at USD3.685 per million British thermal units during U.S. morning trade, up 0.4% on the day.       

The August contract traded in a range between USD3.672 per million British thermal units, the daily low and a session high of USD3.735 per million British thermal units.

Nymex gas futures fell to USD3.669 per million British thermal units on Tuesday, the lowest level since March 13, as weather forecasting models continued to point to below-normal temperatures for the key Northeast region for the next two weeks.

Industry weather group MDA Weather Services said it expected near seasonal or below seasonal temperatures to spread across the eastern half of the nation during the next six-to-15-days.

The U.S. Northeast is a key gas-cooling area. Mild summer temperatures reduce the need for gas-fired electricity to cool homes, dampening demand for natural gas.

Meanwhile, traders also focused on U.S. supply levels. Total U.S. natural gas storage stood 2.438 trillion cubic feet as of last week, 1.9% below the five-year average for this time of year.

Early injection estimates range from 75 billion cubic feet to 95 billion cubic feet, compared to a 58 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 79 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in August was little changed to trade at USD95.33 a barrel, while heating oil for August delivery was flat to trade at USD2.858 per gallon.