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Natural gas dips as weather forecasts throttle back on heat wave calls

Published 08/28/2014, 01:31 PM
Updated 08/28/2014, 01:32 PM
Natural gas prices dip on weather forecasts despite upbeat supply data

Investing.com - Natural gas prices edged lower on Thursday after updated weather-forecasting models eased off on calls for above normal temperatures to hover across the eastern U.S. in the coming week.

On the New York Mercantile Exchange, natural gas futures for delivery in October were down 0.36% at $3.989 per million British thermal units during U.S. trading. The commodity hit a session low of $3.974, and a high of $4.079.

The October contract settled up 1.37% on Wednesday to end at $4.003 per million British thermal units.

Natural gas futures were likely to find support at $3.932 per million British thermal units, Wednesday's low, and resistance at $4.172, the high from July 14.

Recent weather forecasts calling for above-normal temperatures across parts of the eastern U.S. moderated their predictions, which allowed natural gas prices to edge lower.

A Canadian weather system will trek across the central U.S. and bring more comfortable temperatures into the south and Midwest over the next several days.

"This will also bring some cooling into the southern Plains and southeast as highs drop out of the mid and upper 90s and into the upper 80s to lower 90s," Natgasweather.com reported in its Aug.28-Sept. 4 daily weather forecast.

High pressure will return to the central and eastern U.S. around Sept. 2nd-3rd and bring warmer weather with it, though longer-range models calls for cool snaps across the northern U.S. between Sept. 5 and 11.

Elsewhere, a low pressure system in the western Gulf of Mexico stood very little chance of intensifying into a tropical cyclone before it makes landfall, which added to Thursday's selling.

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Tropical weather systems prompt evacuations of gas rigs, which disrupts supply and can hike prices.

Elsewhere, the U.S. Energy Information Administration reported that inventories rose 75 billion cubic feet to 2.63 trillion in the week ending Aug. 22, missing market calls for a build of 78 billion, which gave the commodity some support.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were up 0.67% at $94.51 a barrel, while heating oil for October delivery were down 0.33% at $2.8551 per gallon.

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