Natural gas trade low on weather forecasts

Natural gas futures reached the lowest level since February on Monday, due to mild weather forecasts and concerns over ample supplies.

On the New York Mercantile Exchange, natural gas futures for September delivery decreased 0.25% and traded at 3.339 USD per million British thermal units.

NYMEX gas prices dropped to a session low of 3.315 USD per million British thermal units earlier in the trading session, the lowest level since February 22.

The September contract decreased 1.2% to 3.347 USD per million British thermal units on Friday.

Weather forecasting models kept pointing to cooler temperatures across most of the US Northeast and Midwest over the next six to ten days, depressing summer cooling demand for natural gas.

The demand for natural gas usually fluctuates in the summer based on hot weather and air conditioning use.

US supply levels also remained in focus subsequent to last week’s bearish US inventory data.

Natural gas US storage increased by 59 billion cubic feet last week, higher than market expectations for an increase of only 56 billion cubic feet.

Inventories increased by 28 billion cubic feet in the same week last earlier, while the five year average shift for the week is a build of 47 billion cubic feet.

Total US natural gas storage stood at 2.845 trillion cubic feet as of last week, just 1% below the five year average.

Elsewhere on the New York Mercantile Exchange, US crude oil prices cut losses on Monday after industry data showed the US service sector was busier in July more than analysts expected. Light sweet crude oil futures September delivery dropped 0.35% and traded at 106.56 USD a barrel, while heating oil for September delivery dropped 0.85% and trade at 3.046 USD per gallon.

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