U.S. Gas Drops Most in a Month as Midwest Weather Seen Coolingby
U.S. natural gas dropped the most in about a month as forecasts pointed to cooler weather across the Midwest.
Temperatures in the upper Midwest may be mostly normal Aug. 6 to Aug. 10, according to MDA Weather Services. The high in Chicago may be 82 degrees Fahrenheit (28 degrees Celsius) on Aug. 8, 1 below normal, data from AccuWeather Inc. show.
Fading summer heat across the country has sent gas futures sliding from a 13-month high at the beginning of July. If scorching temperatures don’t show up for the remainder of the summer, a supply glut might persist into the winter, overwhelming demand for the heating and power-plant fuel.
“It’s a less than ideal situation as far as the forecast is concerned," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. "So, you’re going to get a little bit of a pull back.”
Stockpiles rose 17 billion cubic feet to 3.294 trillion cubic feet for the week ended July 22 against a five-year average gain of 52 billion cubic feet, according to the Energy Information Administration. Inventories were 19 percent above the five-year average, down from 54 percent in April.
Futures for September delivery dropped 10.5 cents, or 3.7 percent, to settle at $2.771 per million British thermal units on the New York Mercantile Exchange. The one-day decline was the biggest since July 5. Prices have slid 7.6 percent from the 13-month intraday high of $2.998 on July 1.