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Natural Gas Futures Start The Week Lower

Published 06/25/2018, 10:15 AM
© Reuters.  Natural gas futures drop
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Investing.com - Natural gas futures started the week in negative territory on Monday, as updated forecasting models pointed to cooler temperatures covering most of the country over the next two weeks.

That should dampen summer cooling demand for the fuel.

Front-month U.S. natural gas futures slumped 4.0 cents, or around 1.3%, to $2.905 per million British thermal units (btu) by 10:15AM ET (1415GMT).

The commodity lost around 2.6% last week.

A cool front will sweep across the eastern U.S. the next few days with heavy showers and powerful thunderstorms.

Longer-term models showed considerably cooler temperatures for late next weekend into the following week as weather systems over southern Canada advance more aggressively into the northern and eastern U.S.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early summer cooling demand.

Nearly 50% of all U.S. households use gas for heating.

Total natural gas in storage currently stands at 2.004 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.

That figure is 757 bcf, or around 27.4%, lower than levels at this time a year ago, and 499 bcf, or roughly 19.9%, below the five-year average for this time of year.

Record high domestic production levels have overshadowed the fact that stocks in storage are well below their seasonal averages for this time of year.

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