Spring Cooldown Sends U.S. Gas Futures Lower for a Second Dayby
Forecasts for fading heat in the eastern and central U.S. sent natural gas futures lower for a second day.
Temperatures will be mostly average or below normal in the lower 48 states next week as hot weather in the South ebbs, curtailing gas consumption by electricity generators, according to Commodity Weather Group LLC.
Gas futures have been trading near the lowest seasonal level since the 1990s after a mild winter expanded a supply surplus. Bullish traders need intense summer heat and declining production from shale formations to prevent stockpiles from reaching a record high in the fall.
“These weather forecasts have taken the wind out of the market’s sails,” said Phil Flynn, a senior market analyst at Price Futures Group in Chicago. “There are concerns about the lack of weather-related demand, and there’s the expectation that we’ll see a sizable injection into storage this week.”
Natural gas for May delivery fell 3.1 cents, or 1.5 percent, to settle at $2.032 per million British thermal units on the New York Mercantile Exchange. Prices are down 13 percent this year.
Gas inventories probably climbed by 70 billion cubic feet last week, based on the median of seven analyst estimates compiled by Bloomberg. The five-year average change for the period is a gain of 52 billion.