Natural gas futures posted the biggest one-day gain in almost three weeks on speculation that a final spurt of hot weather before the end of summer will curtail fuel stockpiles, helping to erode a supply surplus that’s weighed on prices.
Above-normal temperatures are projected for most of the continental U.S. from Sept. 1 through Sept. 5, according to MDA Weather Services. The high in Washington Sept. 1 may be 87 degrees Fahrenheit (31 Celsius), 3 more than normal, according to AccuWeather Inc.
An expansion of natural gas stockpiles has slowed amid record demand from power generators this summer and a pullback in production from drillers looking to cut costs after the energy rout. The curtailment of supplies spurred a rebound in prices from a 17-year low reached in March.
“The weather forecast has picked up; it’s sort of like a last gasp” of summer, John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said in a phone call Monday. The market is starting to pay attention “to how much the supply surplus has eroded.”
Natural gas for September delivery jumped 9.5 cents, or 3.7 percent, to settle at $2.679 per million British thermal units on the New York Mercantile Exchange, the biggest one-day gain since Aug. 3.
A surplus to the five year-average has narrowed for 19 straight weeks, according to the U.S. Energy Information Administration. Stockpiles totaled 3.34 trillion as of Aug. 12, 14 percent above the average.