Natural gas futures slipped for a second day as forecasts showed milder weather that would limit air-conditioning demand.
Temperatures may be mostly normal in the eastern half of the U.S. through Aug. 20, Commodity Weather Group LLC said. The high in New York on Aug. 8 may be 83 degrees Fahrenheit (28 Celsius), 1 degree lower than average, according to AccuWeather Inc.
“Temperatures have moderated a little bit, and that’s putting some downward pressure on the market,” said Phil Flynn, a senior market analyst at Price Futures Group in Chicago. “Power generation is going to ease off.”
Natural gas for September delivery fell 6.1 cents, or 2.2 percent, to $2.737 per million British thermal units at 9:22 a.m. on the New York Mercantile Exchange. Volume for all futures traded was 25 percent above the 100-day average. Prices are down 5.3 percent this year.
Cleveland may reach 79 degrees on Aug. 8, 2 below normal. Power plants account for 33 percent of gas demand in the U.S., Energy Information Administration data show.
An EIA report scheduled for release at 10:30 a.m. in Washington may show gas inventories expanded by 40 billion cubic feet in the week ended July 31, based on the median of 21 analyst estimates compiled by Bloomberg. The five-year average increase is 53 billion for the period, while supplies rose by 83 billion a year earlier.
Gas stockpiles totaled 2.88 trillion cubic feet as of July 24, 26 percent above last year’s level for the week and 3 percent higher than the five-year average, EIA data show. Inventories may reach a record 4 trillion cubic feet by the end of October, according to Barclays Plc.
U.S. natural gas output may advance 5.7 percent this year to a record 78.97 billion cubic feet a day, while demand from residential and commercial users is poised to decline, the EIA said July 7 in its monthly Short-Term Energy Outlook report.
Gross gas production climbed 0.6 percent to 91.54 billion cubic feet a day in April from March, the EIA said June 30 in its EIA-914 report. Supply from Texas, the biggest producing state, rose 0.9 percent to 24.26 billion a day.