Investing.com - Natural gas futures declined during U.S. morning trade on Wednesday, pulling back from a four-week high hit in the previous session as market players focused on updated weather forecasts to gauge the strength of early-Autumn cooling demand.
Traders also looked ahead to Thursday’s closely watched U.S. government report on natural gas supplies.
On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD2.822 per million British thermal units during U.S. morning trade, tumbling 1.1%.
It earlier fell by as much as 1.75% to trade at a session low of USD2.804 per million British thermal units. Front-month prices rose to USD2.885 per million British thermal units, which was the strongest level since August 10.
Prices came under pressure after updated weather forecasts released Tuesday predicted mild temperatures were expected to return to key parts of the U.S. next week, reducing the prospect of increased gas demand in the near-term.
The National Weather Service's six- to 10-day outlook predicted for mostly normal temperatures across the Northeast and Midwest and below-normal readings in the Southeast and along the West Coast.
Demand for natural gas tends to fluctuate in late-summer and early-autumn based on hot weather and air conditioning use.
Meanwhile, market players shifted their focus to the U.S. Energy Information Administration’s closely watched weekly report on natural gas inventories scheduled for Thursday.
Early injection estimates range from 21 billion cubic feet to 57 billion cubic feet, compared to last year's build of 62 billion cubic feet. The five-year average change for the week is an increase of 60 billion cubic feet.
Total U.S. gas supplies stood at 3.374 trillion cubic feet, 14.6% above last year’s level and 12% above the five-year average level for the week.
Inventory didn't top the 3.3-trillion cubic feet level in 2011 until the end of September, with stocks peaking at a record 3.852 trillion cubic feet in November of last year.
Market analysts have warned that without strong demand through the rest of the summer cooling season, gas inventories will reach the limits of available capacity later this year.
The storage surplus to last year will have to be cut by at least another 150 billion cubic feet in the 13 weeks left before winter withdrawals begin to avoid breaching the government's 4.1 trillion cubic feet estimate of total capacity.
A bout of extreme heat across much of the U.S. over the past two months helped boost natural gas prices above the key USD3.00-level in recent weeks. Prices rallied to a 2012 high of USD3.275 per million British thermal units on July 31.
But futures have come under heavy selling pressure since the start of August, losing almost 14% after extended weather forecasts pointed to milder weather across most parts of the U.S.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October dropped 0.75% to trade at USD94.59 a barrel, while heating oil for October delivery shed 0.7% to trade at USD3.123 per gallon.
Traders also looked ahead to Thursday’s closely watched U.S. government report on natural gas supplies.
On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD2.822 per million British thermal units during U.S. morning trade, tumbling 1.1%.
It earlier fell by as much as 1.75% to trade at a session low of USD2.804 per million British thermal units. Front-month prices rose to USD2.885 per million British thermal units, which was the strongest level since August 10.
Prices came under pressure after updated weather forecasts released Tuesday predicted mild temperatures were expected to return to key parts of the U.S. next week, reducing the prospect of increased gas demand in the near-term.
The National Weather Service's six- to 10-day outlook predicted for mostly normal temperatures across the Northeast and Midwest and below-normal readings in the Southeast and along the West Coast.
Demand for natural gas tends to fluctuate in late-summer and early-autumn based on hot weather and air conditioning use.
Meanwhile, market players shifted their focus to the U.S. Energy Information Administration’s closely watched weekly report on natural gas inventories scheduled for Thursday.
Early injection estimates range from 21 billion cubic feet to 57 billion cubic feet, compared to last year's build of 62 billion cubic feet. The five-year average change for the week is an increase of 60 billion cubic feet.
Total U.S. gas supplies stood at 3.374 trillion cubic feet, 14.6% above last year’s level and 12% above the five-year average level for the week.
Inventory didn't top the 3.3-trillion cubic feet level in 2011 until the end of September, with stocks peaking at a record 3.852 trillion cubic feet in November of last year.
Market analysts have warned that without strong demand through the rest of the summer cooling season, gas inventories will reach the limits of available capacity later this year.
The storage surplus to last year will have to be cut by at least another 150 billion cubic feet in the 13 weeks left before winter withdrawals begin to avoid breaching the government's 4.1 trillion cubic feet estimate of total capacity.
A bout of extreme heat across much of the U.S. over the past two months helped boost natural gas prices above the key USD3.00-level in recent weeks. Prices rallied to a 2012 high of USD3.275 per million British thermal units on July 31.
But futures have come under heavy selling pressure since the start of August, losing almost 14% after extended weather forecasts pointed to milder weather across most parts of the U.S.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October dropped 0.75% to trade at USD94.59 a barrel, while heating oil for October delivery shed 0.7% to trade at USD3.123 per gallon.