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Natural gas edges lower on forecasts for cooler U.S. weather

Published 09/05/2014, 12:55 PM
Updated 09/05/2014, 12:56 PM
Natural prices dip on forecasts for cooler U.S. weather

Investing.com - Natural gas prices edged lower on Friday after weather-forecasting models called for below-normal temperatures to trek across the U.S. next week.

On the New York Mercantile Exchange, natural gas futures for delivery in October were down 0.82% at $3.788 per million British thermal units during U.S. trading. The commodity hit a session low of $3.785, and a high of $3.846.

The October contract settled down 0.73% on Thursday to end at $3.819 per million British thermal units.

Natural gas futures were likely to find support at $3.732 per million British thermal units, the low from Aug. 17, and resistance at $4.078, Tuesday's high.

Cooler temperature will make their arrival over parts of the U.S. in the coming days and likely curb demand for air conditioning, prompting thermal power plants to burn less of the commodity due to reduced demand.

A fast moving cool front will track across the southern and eastern U.S. over the next several days and bring showers, thunderstorms, and much more comfortable temperatures, Natgasweather.com reported in its daily weather forecast for the Sept. 5-11 period.

While warmer weather will remain over parts of the southern and western U.S., changes may be in store.

"Late next week a strong and unseasonably cold Canadian weather system will be tracking out of the northern Rockies and deep into the central US.," Natgasweather.com reported.

In its Sept. 12-18 forecast, Natgasweather.com reported that a strong Canadian weather system will dive deep into the central and eastern U.S. during the first half of the outlook with much cooler than normal temperatures setting up over many regions.

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"This will even drive some demand for heating over the Midwest and portions of the Northeast. However, it will also bring very pleasant temperatures with highs only in the upper 70s and 80s deep into the southern U.S., which will lead to lower than normal cooling demand," Natgasweather.com reported.

"A very pleasant pattern will follow for much of the U.S. September 15-18th , apart from the West which will remain warmer than normal, including California, as high pressure dominates."

Investors continued to digest Thursday's inventory data.

The Energy Information Administration reported earlier that U.S. natural gas storage rose by 79 billion cubic feet in the week ending Aug. 29 from 75 billion cubic feet in the preceding month.

Analysts were expected a build of 73 billion cubic feet, and the greater-than-expected figure softened natural gas prices.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were down 1.13% at $93.38 a barrel, while heating oil for October delivery were down 0.75% at $2.8150 per gallon.

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