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

Published 05/24/2017, 08:47 AM
Updated 05/24/2017, 08:47 AM
© Reuters.  U.S. natural gas futures under pressure

Investing.com - U.S. natural gas futures were lower for the second session in a row on Wednesday, as updated weather forecasting models points to weaker demand for the fuel.

U.S. natural gas for July delivery slumped 1.6 cents, or around 0.5%, to $3.296 per million British thermal units by 8:45AM ET (12:45GMT).

Prices of the heating fuel tumbled 11.2 cents on Tuesday amid bearish weather forecasts.

The latest U.S. weather model called for mild temperatures over the next two weeks, which should reduce demand during that time.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on spring heating 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 2.369 trillion cubic feet, according to the U.S. Energy Information Administration, 13.6% lower than levels at this time a year ago but 10.8% 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 59 and 69 billion cubic feet in the week ended May 19.

That compares with a gain of 68 billion cubic feet in the preceding week, an increase of 71 billion a year earlier and a five-year average rise of 90 billion cubic feet.

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