U.S. Gas Drops to 2-Week Low on Outlook for Easing Eastern Heatby and
U.S. natural gas futures slid to the lowest in two weeks as meteorologists predicted that a warm spell in the eastern U.S. will ease, reducing demand for the fuel.
The weather may be cooler than previously forecast in the lower 48 states from Sept. 11 through Sept. 15, according to MDA Weather Services. The high in Chicago on Sept. 15 will probably be 70 degrees Fahrenheit (21 Celsius), 6 below normal, AccuWeather Inc. data show.
Falling temperatures will curtail air-conditioner use, limiting gas consumption by power plants as autumn approaches, heralding the “shoulder season” of lower weather-driven demand. While an unusually hot summer helped trim a surplus of gas in storage, inventories remain on course to reach a record before the winter, capping price gains.
“This morning the markets were more focused on temperatures moderating, and that’s giving the market some weakness,” Phil Flynn, a senior analyst at Price Futures Group, said in a note to clients. “We are definitely pricing in the shoulder season.”
Gas futures for October delivery fell 7.5 cents, or 2.7 percent, to settle at $2.717 per million British thermal units on the New York Mercantile Exchange, slipping to the lowest since Aug. 22. Gas is up 16 percent this year.