Natural gas continued its steep fall this week and extended losses on Friday as weather forecasting models continued to point at mild temperatures over key consuming areas of the U.S., reducing demand for the fuel.
On the New York Mercantile Exchange, natural gas for September delivery traded at $3.611 per million British thermal units, down 01.00% on the day. Prices ranged between days high of $3.656 and low at $3.597 per mBtu. The fuel settled 1.64% lower on Thursday and has declined in 4 days out of five, extending this weeks fall to 4.2%.
Natural gas was pressured this week as weather forecasting models pointed at cooling temperatures across key consuming areas. MDA Weather Services and the U.S. National Weather Service expect normal and even below-normal temperatures to settle over states in the U.S. Midwest, Northeast and mid-Atlantic regions next week. When above-normal temperatures are expected, natural gas surges as increased electricity demand to power air-conditioning calls for more supply of the fuel, which is used for a quarter of the U.S. electricity generation. Mild temperatures have the opposite effect.
Yesterday, the Energy Information Administration said in its weekly natural gas reserves report that U.S. natural gas stockpiles rose by 41 million cubic feet in the week ending July 19 and totaled 2 786 billion. The Natural Gas Storage Indicator was 12.5% lower than the same 7-day period last year, which equaled 3 185 billion cubic feet. Last week’s inventories were also 1.6% below the five-year average, which stand at 2 832 billion cubic feet. However, last week’s build was well above the preceding year’s 26 billion cubic feet increase during the comparable week, but below the five-year average gain of 53 billion.
The EIA reported that after a 25 billion cubic feet injection, stocks in the East Region were 120 billion below the five-year average. Meanwhile, stocks in the Producing Region were 45 billion cubic feet above the five-year average of 980 billion after an injection of 12 billion cubic feet.
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