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Natural gas futures move higher in early trade

Published 08/04/2014, 09:03 AM
Natural gas futures rise in early trade
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Investing.com - U.S. natural gas futures edged higher on Monday, though gains were likely to remain limited as short-term weather forecasts kept calling for mild summer temperatures across much of the U.S.

On the New York Mercantile Exchange, natural gas for delivery in September tacked on 0.82%, or 3.1 cents, to trade at $3.829 per million British thermal units during U.S. morning hours.

Natural gas futures ended Friday’s session down 1.12%, or 4.3 cents, to settle at $3.798. Futures were likely to find support at $3.725 per million British thermal units, the low from July 28 and resistance at $3.890, the high from July 31.

Natural gas prices have been under heavy selling pressure in recent weeks as unseasonably cool summer temperatures in much of the U.S. limited demand for the fuel.

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 31 that natural gas storage in the U.S. rose by 88 billion cubic feet last week.

The number was below expectations for an increase of 93 billion cubic feet, but higher than the five-year average change for the week of an increase of 42 billion cubic feet.

Total U.S. natural gas storage stood at 2.307 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 21.7% from 23.5% a week earlier and down from a record 54.7% at the end of March.

The EIA's next storage report is slated for release on Thursday, August 7, with analysts expecting a build of 87 billion cubic feet for the week ending August 1.

Inventories rose by 90 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 49 billion cubic feet.

Elsewhere on the Nymex, U.S. crude oil for delivery in September slumped 0.29%, or 28 cents, to trade at $97.60 a barrel, while heating oil for September delivery dipped 0.01% to trade at $2.865 per gallon.

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