Investing.com - Natural gas prices dropped on Tuesday after weather forecasting models called for falling temperatures across the U.S., which should cut into the need for air conditioning and thus reduce demand for the commodity at the nation's thermal power plants.
On the New York Mercantile Exchange, natural gas futures for delivery in October were down 3.60% at $3.919 per million British thermal units during U.S. trading. The commodity hit a session low of $3.898, and a high of $4.073.
The October contract settled up 0.52% on Friday to end at $4.065 per million British thermal units. U.S. markets were closed on Monday for the Labor Day holiday.
Natural gas futures were likely to find support at $3.732 per million British thermal units, the low from Aug. 17, and resistance at $4.101, last Thursday's high.
Weather forecasting services reported earlier that seasonably warm weather hovering over the Midwest and eastern U.S. will give way to more moderate temperatures around Sept. 6, which sent natural gas prices falling on expectations for homes and businesses to throttle back on air conditioning.
Natural gas prices jumped higher last week, rising above the $4 level for the first time since mid-July on the coattails of above-average U.S. temperatures.
Supplies also remained in focus.
The U.S. Energy Information Administration reported last Thursday that inventories rose 75 billion cubic feet to 2.63 trillion in the week ending Aug. 22, falling short of expectations for a build of 78 billion.
Gas stockpile gains have outpaced the five-year average for 19 consecutive weeks as the U.S. experienced cooler temperatures over the period from June through August.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were down 2.83% at $93.24 a barrel, while heating oil for October delivery were down 1.92% at $2.8051 per gallon.