NEW YORK—Natural-gas futures aimed lower, falling for the fifth-straight session as traders weighed forecasts for cooler temperatures against the steep declines of the past week.
Natural gas for September delivery fell 2.7 cents, or 0.9%, to recently trade at $2.850 a million British thermal units on the New York Mercantile Exchange. Futures traded as high as $2.892/MMBtu earlier in the session.
Gas prices wavered between gains and losses early in Monday's trading. After a sharp fall last week, some investors expect the market to be poised to rebound, if only briefly. Meanwhile, others are keeping watch on forecasts that suggest some relief from hot weather across much of the U.S.
Temperatures across the U.S. are seen to be retreating from well above normal levels earlier this summer, according to the forecaster WSI Energycast. In a forecast for the next week, the group said it expects average temperatures in the Midwest and along the East Coast. In its 11-to-15-day forecast, however, temperatures are expected to creep higher.
Hot weather typically helps raise natural-gas prices. Utilities, responding to increased air conditioning in homes and businesses, burn more of the fuel to meet electricity demand.
Natural-gas futures have tumbled over the past week, dropping below $2.90/MMBtu after trading above $3.20/MMBtu just days ago.
On Thursday, a larger-than-expected increase in U.S. natural-gas stockpiles led to a sharp selloff, and investors grew nervous that rising prices were lowering usage of the fuel.
Dominick Chirichella, an analyst at the Energy Management Institute, said demand for gas is likely to slump as utilities switch back to burning coal.
"It is starting to look like the hot weather alone will not be enough," he said in a research report.
Meanwhile, investors are keeping tabs on Tropical Storm Ernesto, which is currently off the eastern coast of Honduras. The National Hurricane Center expects the storm to cross over Mexico's Yucatan peninsula and continue to head west after briefly entering the southern Gulf of Mexico.
The current track, if accurate, would avoid the oil and gas platforms that dot the coasts of Texas and Louisiana.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $2.925/MMBtu, according to IntercontinentalExchange, compared with Friday's average of $2.9139/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $3.13/MMBtu, up from $3.065/MMBtu.
