Investing.com – Natural gas futures were down on Monday, slumping to a five-month low as moderating weather forecasts in the U.S., ample supplies and concerns over the U.S. economic outlook dragged down prices.
On the New York Mercantile Exchange, natural gas futures for September delivery traded at USD3.901 per million British thermal units during U.S. morning trade, dropping 1.35%.
It earlier fell as much as 3% to trade at USD3.856 per million British thermal units, the lowest price since March 15.
The Commodity Weather Group said on Friday that while it forecast above-normal temperatures in parts of the Central U.S. states in its six-to-10 day forecast, less intense heat was expected in the U.S. Midwest and East during the period.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Concerns over rising production levels also weighed on prices. Industry research group Baker Hughes said on Friday that the number of active rigs drilling for natural gas in the U.S. last week rose to 883 from 877, the third gain in four weeks.
Natural gas traders closely watch the rig count to gauge future supply growth. A drop to the 800-rig-level would be necessary to begin to balance the market, according to Baker Hughes.
Meanwhile, concerns over the U.S. economic outlook were exacerbated after ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA after markets closed Friday.
The ratings agency kept the U.S. rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and “America’s governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed.”
Elsewhere on the Nymex, light sweet crude oil futures for delivery in September plunged 4.15% to trade at a nine-month low of USD83.50 a barrel, while heating oil for September delivery tumbled 2.9% to trade at USD2.861 per gallon.
On the New York Mercantile Exchange, natural gas futures for September delivery traded at USD3.901 per million British thermal units during U.S. morning trade, dropping 1.35%.
It earlier fell as much as 3% to trade at USD3.856 per million British thermal units, the lowest price since March 15.
The Commodity Weather Group said on Friday that while it forecast above-normal temperatures in parts of the Central U.S. states in its six-to-10 day forecast, less intense heat was expected in the U.S. Midwest and East during the period.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Concerns over rising production levels also weighed on prices. Industry research group Baker Hughes said on Friday that the number of active rigs drilling for natural gas in the U.S. last week rose to 883 from 877, the third gain in four weeks.
Natural gas traders closely watch the rig count to gauge future supply growth. A drop to the 800-rig-level would be necessary to begin to balance the market, according to Baker Hughes.
Meanwhile, concerns over the U.S. economic outlook were exacerbated after ratings agency Standard and Poor's downgraded the U.S. sovereign debt rating by one notch to AA+ from AAA after markets closed Friday.
The ratings agency kept the U.S. rating outlook at negative, suggesting a further downgrade could be possible within the next 12 to 18 months.
S&P said the debt ceiling deal reached by lawmakers to cut the federal deficit by an estimated USD2.1 trillion over a decade did not go far enough and “America’s governance and policymaking is becoming less stable, less effective, and less predictable than what we previously believed.”
Elsewhere on the Nymex, light sweet crude oil futures for delivery in September plunged 4.15% to trade at a nine-month low of USD83.50 a barrel, while heating oil for September delivery tumbled 2.9% to trade at USD2.861 per gallon.