Commodities News

Natural gas prices hit 8-month lows on cool U.S. weather forecasts

2014-07-21 17:04:40 GMT (Investing.com)

Investing.com - Natural gas dropped on Monday after updated weather-forecasting models called for below-normal temperatures to make their way across parts of the eastern half of the U.S. in the coming days.

On the New York Mercantile Exchange, natural gas futures for delivery in August traded at $3.834 per million British thermal units during U.S. trading, down 2.96%. The commodity hit a session high of $3.892 and a low of $3.828.

The August contract settled down 0.08% on Friday to end at $3.951 per million British thermal units.

Natural gas futures were likely to find support at $3.741 per million British thermal units, the low from Nov. 26, 2013, and resistance at $4.173, the high from July 14.

Natural gas prices dropped on Monday updated weather-forecasting models called for cooler temperatures to make their way across parts of the heavily-populated Midwest and northeastern U.S. over the next five days.

Demand for natural gas tends drop when temperatures fall in the summer, as households throttle back on their air conditioners.

Last week's supply report weighed on prices as well.

The U.S. Energy Information Administration said in its weekly report last Thursday that natural gas storage in the U.S. rose by 107 billion cubic feet last week, well above expectations for an increase of 98 billion cubic feet.

The five-year average change for the week is an increase of 65 billion cubic feet.

Total U.S. natural gas storage stood at 2.129 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 25.5%, down from a record 54.7% at the end of March.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September were up 0.28% at $102.24 a barrel, while heating oil for August delivery were up 0.01% at $2.8454 per gallon.