U.S. Natural Gas Futures Pause for Breath After Rallying to 4-Month High
Investing.com - U.S. natural gas futures were stable on Tuesday, pausing for breath after rallying to a four-month peak in the prior session amid bullish weather forecasts and a flurry of tropical storm activity in the Atlantic. U.S. natural gas for October delivery was at $3.147 per million British thermal units by 8:45AM ET (1245GMT), little changed on the session. It touched its best level since May 31 at $3.166 a day earlier. Futures climbed 4%, on Monday, as updated forecasts pointed to unusually warm weather in key gas-consuming regions in the U.S. in the week ahead. High pressure will dominate the southern and east-central U.S. with highs of 80s and 90s through Sept. 25. Meanwhile, traders said they were closely eying the path of Hurricane Maria, another top category Atlantic storm that hit the Caribbean islands on Tuesday, to see whether it would knock out production or disrupt shipping to and from the huge U.S. market. Market participants also looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 82 and 92 billion cubic feet in the week ended September 15. That compares with a gain of 91 billion cubic feet in the preceding week, a build of 52 billion a year earlier and a five-year average rise of 73 billion cubic feet. Total natural gas in storage currently stands at 3.311 trillion cubic feet, according to the U.S. Energy Information Administration, around 5.1% lower than levels at this time a year ago and 1.3% above the five-year average for this time of year. Despite recent gains, natural gas futures look set to remain on the back foot in the weeks ahead as traders react to the reality that higher summer demand for the commodity is coming to an end. Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning. But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.
