BB: Natural Gas Futures Fall on Outlook for Moderate July Heat
Natural gas futures declined as weather forecasts for July heat moderated, signaling reduced demand for the power-plant fuel.
East Coast temperatures will be mostly seasonal through July 20, while the Southeast may see higher readings over the next 10 days, said Commodity Weather Group LLC. Previous computer models showed above-normal temperatures sweeping the region next week.
“This time of the year, when you get a big move like this, it’s usually a weather forecast change,” said Tom Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami. “It’s more seasonal. I’m a little on the bullish side. We still have the hottest part of the summer in front of us.”
Natural gas for August delivery fell 6.2 cents, or 2.2 percent, to $2.76 per million British thermal units at 10:22 a.m. on the New York Mercantile Exchange after slipping to $2.731, the lowest intraday price since June 24. Gas is down 4.5 percent this year.
August $2.50 puts were the most active options in electronic trading. They rose 0.6 cent to 2.6 cents on volume of 680 contracts at 10:22 a.m.
The 15-day weather outlook shows that “no sustained strong cool or hot patterns are dominating,” Matt Rogers, president of Commodity Weather, said in a note to clients. “The result is a lot of near-normal temperature ranges over the next two weeks.”
New York
The high in Manhattan on July 15 may be 81 degrees Fahrenheit (27 Celsius), 3 lower than average, before jumping the next day to 91, AccuWeather Inc. said on its website. Electricity producers will account for 48 percent of U.S. gas consumption in the third quarter, according to the Energy Information Administration.
Gas stockpiles probably rose by 90 billion cubic feet last week, Dominick Chirichella, senior partner at the Energy Management Institute in New York, said in a note to clients. The five-year average storage injection for the period is 75 billion. Supplies rose 94 billion the same week last year.
Inventories totaled 2.577 trillion cubic feet on June 26, 1.1 percent above the five-year average, according to the EIA, which is scheduled to release its next supply report on July 9.
