Investing.com - Natural gas futures came under heavy selling pressure during U.S. morning hours on Wednesday, as forecasts showing mild weather across much of the U.S. East Coast in the next two weeks weighed on future demand expectations for the fuel.
Traders also looked ahead to Thursday’s closely-watched U.S. government report on natural gas supplies.
On the New York Mercantile Exchange, natural gas futures for delivery in September traded at USD2.759 per million British thermal units during U.S. morning trade, tumbling 2.65%.
It earlier fell by as much as 2.65% to trade at a session low of USD2.757 per million British thermal units. Front-month prices touched a seven-week low of USD2.715 per million British thermal units on August 13.
A bout of extreme heat across much of the U.S. over the past two months helped boost natural gas prices above the key USD3.00-level in recent weeks. Prices rallied to a 2012 high of USD3.275 per million British thermal units on July 31.
But futures have come under heavy selling pressure since the start of August, losing almost 15% after extended weather forecasts pointed to milder weather across most parts of the U.S. throughout most of the month.
Industry weather group MDA EarthSat said Tuesday that "seasonally cool" temperatures are expected for much of the U.S. over the next ten days, with only "minor warming trends" through the end of August.
Cooler summer temperatures reduce the need for gas-fired electricity to power air conditioning, dampening demand for natural gas.
Market players shifted their focus to the U.S. Energy Information Administration’s closely-watched weekly report on natural gas inventories scheduled for Thursday.
Early injection estimates range from 25 billion cubic feet to 40 billion cubic feet, compared to last year's build of 43 billion cubic feet. The five-year average change for the week is an increase of 43 billion cubic feet.
Total U.S. gas supplies stood at 3.241 trillion cubic feet last week, 16.8% above last year’s level and 13.5% above the five-year average level for the week.
Market analysts have warned that without strong demand through the rest of the summer cooling season, gas inventories will reach the limits of available capacity later this year.
Stocks peaked last year in November at a record 3.852 trillion cubic feet.
The storage surplus to last year will have to be cut by at least another 150 billion cubic feet in the 15 weeks left before winter withdrawals begin to avoid breaching the government's 4.1 trillion cubic feet estimate of total capacity.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September shed 0.5% to trade at USD92.94 a barrel, while heating oil for September delivery eased up 0.3% to trade at USD3.043 per gallon.
Traders also looked ahead to Thursday’s closely-watched U.S. government report on natural gas supplies.
On the New York Mercantile Exchange, natural gas futures for delivery in September traded at USD2.759 per million British thermal units during U.S. morning trade, tumbling 2.65%.
It earlier fell by as much as 2.65% to trade at a session low of USD2.757 per million British thermal units. Front-month prices touched a seven-week low of USD2.715 per million British thermal units on August 13.
A bout of extreme heat across much of the U.S. over the past two months helped boost natural gas prices above the key USD3.00-level in recent weeks. Prices rallied to a 2012 high of USD3.275 per million British thermal units on July 31.
But futures have come under heavy selling pressure since the start of August, losing almost 15% after extended weather forecasts pointed to milder weather across most parts of the U.S. throughout most of the month.
Industry weather group MDA EarthSat said Tuesday that "seasonally cool" temperatures are expected for much of the U.S. over the next ten days, with only "minor warming trends" through the end of August.
Cooler summer temperatures reduce the need for gas-fired electricity to power air conditioning, dampening demand for natural gas.
Market players shifted their focus to the U.S. Energy Information Administration’s closely-watched weekly report on natural gas inventories scheduled for Thursday.
Early injection estimates range from 25 billion cubic feet to 40 billion cubic feet, compared to last year's build of 43 billion cubic feet. The five-year average change for the week is an increase of 43 billion cubic feet.
Total U.S. gas supplies stood at 3.241 trillion cubic feet last week, 16.8% above last year’s level and 13.5% above the five-year average level for the week.
Market analysts have warned that without strong demand through the rest of the summer cooling season, gas inventories will reach the limits of available capacity later this year.
Stocks peaked last year in November at a record 3.852 trillion cubic feet.
The storage surplus to last year will have to be cut by at least another 150 billion cubic feet in the 15 weeks left before winter withdrawals begin to avoid breaching the government's 4.1 trillion cubic feet estimate of total capacity.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September shed 0.5% to trade at USD92.94 a barrel, while heating oil for September delivery eased up 0.3% to trade at USD3.043 per gallon.