Investing.com – Natural gas futures were down sharply on Tuesday, falling below the psychologically important USD4.00 level as moderating weather forecasts in the U.S., easing fears over a disruption to supplies and concerns over rising production levels dragged down prices.
On the New York Mercantile Exchange, natural gas futures for September delivery traded at USD3.936 per million British thermal units during U.S. morning trade, plunging 2.2%.
It earlier fell as much as 2.3% to trade at USD3.934 per million British thermal units, the lowest price since August 9.
The Commodity Weather Group said over the weekend that while it expected above-average temperatures across the Western U.S. states in the coming week, the firm’s six-to-15 day forecast showed less intense heat was forecast in the U.S. Midwest and East during the period.
Industry weather group Weather Services International said in a report earlier that, “July was obviously very hot for much of the nation, but for August, it looks like it's going to be more changeable.”
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Predictions of below-average or above-average temperatures may prompt traders to buy or sell gas futures.
Meanwhile, the U.S. National Hurricane Center reported that Tropical Storm Gert continues to weaken as it approaches the North Atlantic, adding that it posed no hazard to land and was likely to turn east and head back out to sea.
Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 10% of U.S. natural gas production.
Ongoing concerns over rising production levels also weighed on prices. Industry research group Baker Hughes said last week that the number of active rigs drilling for natural gas in the U.S. rose to 896 from 883, the fourth gain in five weeks and the highest since early March.
Natural gas traders closely watch the rig count to gauge supply growth. Many analysts believe the gas-rig count must decline to close to 800 to balance production with demand.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in October shed 0.3% to trade at USD87.40 a barrel, while heating oil for September delivery added 0.15% to trade at USD2.948 per gallon.
On the New York Mercantile Exchange, natural gas futures for September delivery traded at USD3.936 per million British thermal units during U.S. morning trade, plunging 2.2%.
It earlier fell as much as 2.3% to trade at USD3.934 per million British thermal units, the lowest price since August 9.
The Commodity Weather Group said over the weekend that while it expected above-average temperatures across the Western U.S. states in the coming week, the firm’s six-to-15 day forecast showed less intense heat was forecast in the U.S. Midwest and East during the period.
Industry weather group Weather Services International said in a report earlier that, “July was obviously very hot for much of the nation, but for August, it looks like it's going to be more changeable.”
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Predictions of below-average or above-average temperatures may prompt traders to buy or sell gas futures.
Meanwhile, the U.S. National Hurricane Center reported that Tropical Storm Gert continues to weaken as it approaches the North Atlantic, adding that it posed no hazard to land and was likely to turn east and head back out to sea.
Energy traders track tropical storm activity in the event it disrupts production in the Gulf of Mexico, which is home to 10% of U.S. natural gas production.
Ongoing concerns over rising production levels also weighed on prices. Industry research group Baker Hughes said last week that the number of active rigs drilling for natural gas in the U.S. rose to 896 from 883, the fourth gain in five weeks and the highest since early March.
Natural gas traders closely watch the rig count to gauge supply growth. Many analysts believe the gas-rig count must decline to close to 800 to balance production with demand.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in October shed 0.3% to trade at USD87.40 a barrel, while heating oil for September delivery added 0.15% to trade at USD2.948 per gallon.