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Natural gas futures tumble to 8-month low on cool summer weather

Published 07/21/2014, 08:57 AM
Natural gas futures hit 8-month low on demand outlook
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Investing.com - U.S. natural gas futures fell to the lowest level since November on Monday, as unseasonably cool summer temperatures in much of the U.S. was likely to limit demand for the fuel.

On the New York Mercantile Exchange, natural gas for delivery in August fell to a session low of $3.845 per million British thermal units, the weakest level since November 27, before coming off the lows to last trade at $3.863, down 2.24%, or 8.8 cents.

Natural gas futures ended Friday’s session down 0.08%, or 0.3 cents, to settle at $3.951. Futures were likely to find support at $3.834 per million British thermal units, the low from November 27 and resistance at $3.976, the high from July 18.

Nymex natural gas prices lost 4.7%, or 19.5 cents, last week, the fifth consecutive weekly decline.

Natural gas prices have been under pressure in recent sessions after updated weather-forecasting models called for cooler temperatures across most parts of the heavily-populated Midwest and Northeast regions over the next five 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.

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.

Elsewhere on the Nymex, U.S. crude oil for delivery in September eased up 0.05%, or 6 cents, to trade at $102.01 a barrel, while heating oil for August delivery tacked on 0.25% to trade at $2.852 per gallon.

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