U.S Gas Drops From 10-Week High as Weather Outlook Turns Milderby
U.S. natural gas futures slid from the highest price in 10 weeks as revised forecasts showed less-intense heat in the Southeast, limiting demand for electricity generation.
Above-normal temperatures from Pennsylvania to Texas will give way to cooler readings next week, according to MDA Weather Services. The high in Atlanta on May 1 may be 76 degrees Fahrenheit (24 Celsius), matching the average, AccuWeather Inc. data show.
Gas surged to the highest level since Feb. 8 Friday on speculation that hot weather would boost demand for the power-plant fuel, helping to trim the biggest seasonal stockpile glut in four years. Without sustained heat and a decline in output from shale basins, supplies will be on course to test physical storage constraints in the fall.
“The forecasts have turned a bit milder, which is why the market isn’t holding the highs from last week,” said Gene McGillian, a senior analyst and broker at Tradition Energy. “It doesn’t look like cooling demand is going to be as strong as people thought.”
Natural gas for April delivery fell 7.7 cents, or 3.6 percent, to settle at $2.063 per million British thermal units on the New York Mercantile Exchange. Prices last week capped the biggest seven-day gain since December.