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Natural gas futures fall to 9-day low as storm fears ease

Published 09/12/2011, 10:59 AM
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Investing.com – Natural gas futures fell to a nine-day low on Monday, as fears over a disruption to supplies in the Gulf of Mexico eased, while milder weather forecasts for the eastern U.S. states also weighed.

On the New York Mercantile Exchange, natural gas futures for October delivery traded at USD3.886 per million British thermal units during U.S. morning trade, slumping 0.73%.

It earlier fell as much as 1.3% to trade at USD3.846 per million British thermal units, the lowest price since August 30.

The U.S. National Hurricane Center said earlier that Tropical Storm Nate weakened to a post-tropical cyclone after making landfall in central-eastern Mexico on Sunday, away from the oil-rich Gulf of Mexico region.

The NHS added that Tropical Storm Maria moved further away from the Gulf, heading northwest with little change in strength forecast.  

“The center of Maria will continue moving away from the islands of the northeastern Caribbean and pass well east of the southeastern Bahamas,” the NHS said in a weather advisory earlier.

Major oil and natural gas producers, such ass British Petroleum and Exxon said workers were returning to production facilities in the western Gulf, after being evacuated before the weekend.

Approximately 4% of natural gas output in the Gulf remained shut-in as of Friday, according to the U.S. Bureau of Ocean Energy Management.

Natural gas 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.

Natural gas prices came under further pressure amid concerns over the short-term demand outlook for the fuel, as the peak summer cooling-demand season was approaching an end.

The U.S. National Weather Service’s six-to-ten day weather forecast showed that temperatures in the eastern half of the U.S. will be cooling during the upcoming week.

Elsewhere on the Nymex, light sweet crude oil futures for delivery in October eased up 0.15% to trade at USD87.38 a barrel, while heating oil for October delivery dropped 1.26% to trade at USD2.947 per gallon.


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