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Commodities - U.S. Natural Gas Futures Rally to 4-Month Highs

Published 2017-09-18, 09:05 a/m
© Reuters.  U.S. natural gas rallies to 4-month highs
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Investing.com - U.S. natural gas futures started the week on an upbeat note on Monday, extending last week's rally to reach their highest level since late May as market players continued to monitor weather forecasts to gauge near-term demand prospects.

A trio of potential hurricanes forming in the Atlantic were also in focus.

U.S. natural gas for October delivery was at $3.117 per million British thermal units by 9:05AM ET (1305GMT), up 9.2 cents, or around 3%, after hitting its best level since May 31 at $3.132 earlier.

Futures climbed 4.6% last week.

High pressure will dominate the southern and east-central U.S. with highs of 80s and 90s in the coming days.

Despite recent gains, prices look set to remain on the back foot in the weeks ahead as traders react 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.

Market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 82 and 92 billion cubic feet in the week ended September 15.

That compares with a gain of 91 billion cubic feet in the preceding week, a build of 52 billion a year earlier and a five-year average rise of 73 billion cubic feet.

Total natural gas in storage currently stands at 3.311 trillion cubic feet, according to the U.S. Energy Information Administration, around 5.1% lower than levels at this time a year ago and 1.3% above the five-year average for this time of year.

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