Cooler US Weather Forecasts Weigh on Nat-Gas Prices
US natural gas prices retreated to a one-week low on Monday as weather forecasts signaled a cooler stretch ahead, potentially dampening demand for air conditioning. The Commodity Weather Group forecast cooler-than-average temperatures across the eastern United States from August 22-31. Meanwhile, the US Energy Information Administration projected that US nat-gas storage levels would reach 3,985 billion cubic feet by the end of October, the highest in 10 years and 5% above the five-year average, indicating abundant supplies.
US natural gas production on Monday was 114.1 billion cubic feet per day, a 4.1% year-over-year increase, while gas demand in the lower 48 states was 82.5 billion cubic feet per day, a 5.1% year-over-year gain. Despite these positive signs, US nat-gas prices have faced bearish pressure from lower crude oil prices and the potential impact of an El Niño weather system bringing warmer-than-normal temperatures to the Northern Hemisphere.
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