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U.S. natural gas futures decline with weather, supply in focus

Published 05/03/2017, 09:13 AM
© Reuters.  U.S. natural gas futures edge lower

Investing.com - U.S. natural gas futures edged lower in early trade on Wednesday, as traders continued to monitor shifting weather forecasts to assess the outlook for early-spring demand and supply levels.

U.S. natural gas for June delivery slipped around 1.0 cent, or about 0.3%, to $3.187 per million British thermal units by 9:10AM ET (13:10GMT).

Prices of the heating fuel fell for the second consecutive session on Tuesday.

A strong spring storm tracking through the southeastern U.S. with heavy showers and thunderstorms will push across the Great Lakes and Northeast this weekend into early next week to keep below normal temperatures in place.

Overall, natural gas demand will be slightly stronger than normal well into next week, according to forecasters at NatGasWeather.com.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on spring demand.

Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.

Nearly 50% of all U.S. households use gas for heating.

Total natural gas in storage currently stands at 2.189 trillion cubic feet, according to the U.S. Energy Information Administration, 14.0% lower than levels at this time a year ago but 13.7% above the five-year average for this time of year.

The EIA's next storage report due Thursday is expected to show a build in a range between 57 and 65 billion cubic feet in the week ended April 28.

That compares with a gain of 74 billion cubic feet in the preceding week, an increase of 68 billion a year earlier and a five-year average rise of 63 billion cubic feet.

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