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U.S. natural gas slides to 2-week low ahead of weekly storage data

CommoditiesSep 07, 2016 10:33AM ET
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© Reuters. U.S. natural gas prices slide to fresh 2-week low

Investing.com - U.S. natural gas futures declined for the second day in a row on Wednesday, touching a more than two-week low as market players looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.

Natural gas for delivery in October on the New York Mercantile Exchange fell to an intraday low of $2.687 per million British thermal units, the weakest level since August 23.

It was last at $2.696 by 10:32AM ET (14:32GMT), down 2.1 cents, or 0.77%.

Market players looked ahead to weekly supply data due on Thursday, which is expected to show a build of approximately 40 billion cubic feet in the week ended September 2.

That compares with a gain of 51 billion cubic feet in the preceding week, 72 billion a year earlier and a five-year average build of 64 billion cubic feet.

Total gas in storage currently stands at 3.401 trillion cubic feet, according to the U.S. Energy Information Administration, 7.0% higher than levels at this time a year ago and 9.8% above the five-year average for this time of year.

On Tuesday, gas futures sank 7.5 cents, or 2.69%, as traders reacted to the reality that higher summer demand for the commodity is coming to an end.

Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.

But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.

Unless intense late-summer heat boosts demand from power plants, stockpiles could possibly test physical storage limits of 4.3 trillion cubic feet at the end of October.

U.S. natural gas slides to 2-week low ahead of weekly storage data
 

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denis belov
denis belov Sep 07, 2016 8:15PM GMT
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I am not really an expert in this, Is this natural gas gotten from crude oil? and what is this gas normally used for?
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