U.S. Gas Falls on Mixed Weather View as October Contract Expiresby
U.S. natural gas futures dropped before the October contract expiration as forecasts showed a mix of warm and cool weather that would cap demand for the heating and power-plant fuel.
Temperatures may be above normal in the eastern half of the U.S. and below average in the western half from Oct. 3 through Oct. 7, according to Commodity Weather Group. The pattern will “lead to a very slight gain in late-season cooling demand and a slight loss in early-season heating demand,” CWG forecasters led by Matt Rogers said in a note to clients Wednesday.
Milder weather in the fall will allow gains in gas inventories to accelerate, pressuring prices for the fuel after futures climbed above $3 per million British thermal units for the first time since May 2015 last week. While a scorching summer pared a stockpile glut, supplies remain above normal seasonal levels.
“The weather forecast is bearish, especially in the Northeast,” said John Kilduff, a partner at Again Capital LLC in New York “There’s an absence of cooling demand and not a whole heck of a lot of heating demand.”
Gas futures for October delivery fell 4.4 cents, or 1.5 percent, to settle at $2.952 per million British thermal units on the New York Mercantile Exchange. Prices are up 2.3 percent this month.
October gas expired Wednesday. The more actively traded November contract slipped 4.8 cents to $3.002 per million Btu.