U.S. Natural Gas Drops Third Day on Larger Inventory Outlook
Natural gas futures dropped for a third day in New York on speculation that weekly Energy Information Administration data will show a bigger-than-average increase in U.S. stockpiles.
Gas for July delivery slid as much as 0.4 percent to $3.71 per million British thermal units in electronic trading on the New York Mercantile Exchange and was at $3.717 at 11 a.m. Singapore time. The contract settled at $3.724 yesterday, the lowest closing price since March 13.
U.S. inventories probably rose 95 billion cubic feet in the week ended June 7, according to the median estimate of nine analysts surveyed by Bloomberg News before a report tomorrow from the EIA, the Energy Department’s statistics unit. The five-year average gain for the week is 84 billion.
“We’re starting to get some bigger storage numbers and that doesn’t bode well for higher prices in the future,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said yesterday. “The market is continuing to work its way south and there’s no reason to believe it will find support here.”
WSI Corp. in Andover, Massachusetts, said temperatures will be normal or lower than average in the eastern U.S. and northern Midwest from June 16 through June 25.
The high in New York on June 20 may be 69 degrees Fahrenheit (21 Celsius), 12 degrees less than usual, according to AccuWeather Inc. in State College, Pennsylvania. The high in Chicago may be 70 degrees, also 12 degrees below normal.
Power generators account for 32 percent of U.S. gas demand, according to the EIA’s monthly Short-Term Energy Outlook yesterday.
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