US natural gas futures settled 1 percent lower on Monday on expectations that high summer temperatures will peak this week, paring demand for air conditioning from gas-powered electricity over the next fortnight. Front-month gas futures settled down 2.6 cents, or 1 percent, at $2.689 per million British thermal units on the New York Mercantile Exchange.
The contract had fallen as much as 7.2 cents, or 2.7 percent, earlier to a session low of $2.643 on speculation of how much temperatures could fall in the coming days. "The expectation is we'll peak out in terms of weather by Wednesday and from there on, temperatures will only be going down," said Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas in New York. In a report circulated earlier on Monday, Viswanath said the abrupt end of the summer heat wave suggested the potential for "blow-out end-of-season inventory restocking."
Early analysts' estimates compiled by Reuters show US utilities added an average of 83 billion cubic feet (bcf) of gas to storage for the week ended August 28, higher than the 69 bcf in the week to August 21, likely due to the smaller amount of gas they burnt last week for cooling. Reuters will update its gas storage estimates through Wednesday before Thursday's official data from the US Energy Information Administration. MDA Weather Services also noted generally cooler temperatures in its six-to-ten day forecast, although it warned of intermittent warmth.
Comments
Comments are closed.