Investing.com – Natural gas futures were down sharply on Monday, hovering close to a five-month low as moderating weather forecasts in the U.S. and concerns over rising production levels dragged down prices.
On the New York Mercantile Exchange, natural gas futures for October delivery traded at USD3.875 per million British thermal units during U.S. morning trade, tumbling 1.55%.
It earlier fell as much as 1.93% to trade at USD3.856 per million British thermal units, the lowest price since August 18, when prices fell to a five-month low of USD3.844.
Natural gas prices have traded below the psychologically important USD4.00 level in 12 of the past 13 sessions.
The Commodity Weather Group said earlier that that while it expected above-average temperatures across the Southern 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.
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 Friday that the number of active rigs drilling for natural gas in the U.S. last week rose to 900 from 886, the fifth gain in six weeks and the highest since late February.
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, Bank of America lowered its fourth quarter natural gas average price forecast to USD4.25 per million British thermal units.
The lender also cut its 2012 average price forecast to USD4.70 per million British thermal units, citing ample U.S. supplies.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in October edged 0.56% higher to trade at USD83.20 a barrel, while heating oil for September delivery slumped 1.16% to trade at USD2.891 per gallon.
On the New York Mercantile Exchange, natural gas futures for October delivery traded at USD3.875 per million British thermal units during U.S. morning trade, tumbling 1.55%.
It earlier fell as much as 1.93% to trade at USD3.856 per million British thermal units, the lowest price since August 18, when prices fell to a five-month low of USD3.844.
Natural gas prices have traded below the psychologically important USD4.00 level in 12 of the past 13 sessions.
The Commodity Weather Group said earlier that that while it expected above-average temperatures across the Southern 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.
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 Friday that the number of active rigs drilling for natural gas in the U.S. last week rose to 900 from 886, the fifth gain in six weeks and the highest since late February.
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, Bank of America lowered its fourth quarter natural gas average price forecast to USD4.25 per million British thermal units.
The lender also cut its 2012 average price forecast to USD4.70 per million British thermal units, citing ample U.S. supplies.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in October edged 0.56% higher to trade at USD83.20 a barrel, while heating oil for September delivery slumped 1.16% to trade at USD2.891 per gallon.