Natural Gas Futures Pull Back From 4-Month Highs

Investing.com – Natural gas futures fell on Tuesday, pulling back from a four-month high as updated forecasting models pointed to milder temperatures covering the eastern part of the United States by the second week of June.

That should limit early summer cooling demand for the fuel.

Front-month slumped 6.7 cents, or around 2.3%, to $2.896 per million British thermal units (btu) by 9:14AM ET (1314GMT), after hitting a high of $3.000, the strongest since January 31.

Futures did not settle on Monday due to the Memorial Day holiday.

Natural gas prices have been boosted in recent weeks by forecasts of building heat across major areas of the U.S.

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.

Meanwhile, market participants looked ahead to this week’s storage data due on Thursday. Analysts forecast an increase in a range between 92 and 102 billion cubic feet (bcf) for the week ended May 25.

That compares with a build of 91 bcf in the preceding week, an increase of 81 bcf a year earlier and a five-year average rise of 97 bcf.

Total natural gas in storage currently stands at 1.629 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.

That figure is 804 bcf, or around 33.0%, lower than levels at this time a year ago, and 499 bcf, or roughly 23.4%, below the five-year average for this time of year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.