Natural-gas prices wavered Monday as weather forecasts for the last half of August continued to point to cooler weather.
Natural gas for September delivery was up 3 cents, at $3.81 a million British thermal units on the New York Mercantile Exchange, after slipping to $3.727 in early trade. Prices are now 20% below their mid-June peak, as robust inventory growth has disproven market views that high summer cooling demand would strain supplies.
“As we shuffle away from the peak of summertime and toward the peak of hurricane season, both have been lacking in their usual bullish impact,” Schneider Electric analyst Matt Smith said in a note.
Temperatures along the Eastern Seaboard continued to moderate in the two-week outlook, and a Canadian storm formation is expected to sweep down across the northern U.S., further reducing demand for natural gas. Utilities use gas to generate electricity, and demand rises in hot weather to cool offices and homes.
Traders are looking ahead to weekly storage data on Thursday from the U.S. Energy information Administration, which is expected to show yet another addition to stockpiles that is much higher than average. Current inventory levels are 19% below average levels, but more than two months remain for utilities to add supplies to storage before demand for gas to heat homes kicks in.
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