Natural gas fell more than 3% on Monday and touched its lowest level since February as weather forecasters predicted below-normal temperatures across key consuming areas.
On the New York Mercantile Exchange, natural gas for September delivery marked a new days low at $3.429 per million British thermal units at 14:11 GMT, down 3.77% on the day. This was the lowest level since February 24. Days high stood at $3.515 per mBtu. The fuel declined in six out of seven days and closed the last week 5.20% lower after advancing little over 4% the preceding two.
Natural gas continued its steep fall as weather forecasters predicted temperatures in key consuming areas will remain at seasonal and below-seasonal levels. MDA Weather Services in Gaithersburg, Maryland, said most of the eastern U.S. will experience seasonal temperatures between July 31 and August 9 and readings in the Midwest will be lower. According to AccuWeather Inc. in State College, Pennsylvania, highest temperatures in New York on August 9 will reach 76 degrees Fahrenheit, 8 below normal. In Atlanta, readings may rise to as much as 81 degrees, 7 lower than the average.
Market players will be looking ahead into this weeks EIA natural gas storage report. Last week, the Energy Information Administration said 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.
Elsewhere on the market, WTI crude remained lower on the day and traded at $104.16 per barrel at 14:12 GMT, down 0.49% on the day. Prices ranged between days high at $105.36 and low of $103.88 per barrel, the lowest since July 9. Meanwhile on the ICE, Brent oil for September delivery stood at $106.88 at 14:12 GMT, down 0.28% on the day. Futures held in range between high and low of $107.85 and $106.60 respectively.
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