Investing.com – Natural gas futures were down on Wednesday, slumping to a three-day low as forecasts that a heat wave in the U.S. Midwest will moderate reduced demand expectations for the fuel.
On the New York Mercantile Exchange, natural gas futures for August delivery traded at USD4.495 per million British thermal units during U.S. morning trade, shedding 0.65%.
It earlier fell as much as 1% to trade at USD4.473 per million British thermal units, the lowest price since July 15.
Traders looked past the heat wave that has supported demand for the fuel in the past week on speculation that the market’s recent rally had accounted for the boost to cooling needs.
Industry weather group MDA Federal said earlier it expected seasonally normal temperatures to return to the U.S. Midwest and Eastern states towards the end of July and early August.
Natural gas traders monitor weather forecasts to determine whether temperatures may boost heating or cooling demand. Predictions of below-average or above-average temperatures may prompt traders to buy or sell gas futures.
Meanwhile, the Commodity Weather Group said that Tropical Storm Bret was forecast to move away from the Gulf of Mexico towards the open Atlantic, easing concerns over a disruption to supplies.
Production in federal waters in the Gulf accounts for about 10% of natural-gas output, and prices typically spike when storms threaten production.
Markets were looking forward to the U.S. Energy Information Administration’s weekly report on U.S. natural gas stockpiles for the week ended July 15 on Thursday.
The report was expected to show that U.S. natural gas inventories increased by 67 billion cubic feet, after adding 84 billion cubic feet in the preceding week.
Elsewhere, on the NYMEX light sweet crude oil futures for delivery in September rose 0.55% to trade at USD98.58 a barrel, while heating oil for August delivery added 0.25% to trade at USD3.111 per gallon during U.S. morning trade.
On the New York Mercantile Exchange, natural gas futures for August delivery traded at USD4.495 per million British thermal units during U.S. morning trade, shedding 0.65%.
It earlier fell as much as 1% to trade at USD4.473 per million British thermal units, the lowest price since July 15.
Traders looked past the heat wave that has supported demand for the fuel in the past week on speculation that the market’s recent rally had accounted for the boost to cooling needs.
Industry weather group MDA Federal said earlier it expected seasonally normal temperatures to return to the U.S. Midwest and Eastern states towards the end of July and early August.
Natural gas traders monitor weather forecasts to determine whether temperatures may boost heating or cooling demand. Predictions of below-average or above-average temperatures may prompt traders to buy or sell gas futures.
Meanwhile, the Commodity Weather Group said that Tropical Storm Bret was forecast to move away from the Gulf of Mexico towards the open Atlantic, easing concerns over a disruption to supplies.
Production in federal waters in the Gulf accounts for about 10% of natural-gas output, and prices typically spike when storms threaten production.
Markets were looking forward to the U.S. Energy Information Administration’s weekly report on U.S. natural gas stockpiles for the week ended July 15 on Thursday.
The report was expected to show that U.S. natural gas inventories increased by 67 billion cubic feet, after adding 84 billion cubic feet in the preceding week.
Elsewhere, on the NYMEX light sweet crude oil futures for delivery in September rose 0.55% to trade at USD98.58 a barrel, while heating oil for August delivery added 0.25% to trade at USD3.111 per gallon during U.S. morning trade.