Natural Gas Futures Start the Week on the Backfoot

Investing.com – U.S. natural gas futures started the week on a downbeat note on Monday, pulling back from a two-week high, as traders reacted to forecasts showing a return to mild weather after a cold spell in the eastern U.S.

Warm high pressure will return during the second half of this week east of the Rockies through the weekend with highs of upper 60s and 70s across the northern U.S., and upper 70s to near 90°F over the southern U.S.

Bearish speculators are betting that the warmer weather will reduce early-winter demand for the heating fuel.

Gas futures often reach a seasonal low in October, when mild weather weakens demand, before recovering in the winter, when heating-fuel use peaks.

for November delivery sank 7.5 cents, or around 2.5%, to $2.925 per million British thermal units by 8:55AM ET (1255GMT). It rose to its best level since Sept. 29 at $3.036 on Friday.

Futures saw a gain of about 4.8% last week amid a recent bump in heating demand.

Market participants started to look ahead to this week’s storage data due on Thursday, which is expected to show a build in a range between 52 and 62 billion cubic feet in the week ended October 13.

That compares with a gain of 87 billion cubic feet in the preceding week, a build of 77 billion a year earlier and a five-year average rise of 78 billion cubic feet.

Total natural gas in storage currently stands at 3.595 trillion cubic feet, according to the U.S. Energy Information Administration. That figure is 153 billion cubic feet (bcf), or around 4.1%, lower than levels at this time a year ago and 8 bcf, or roughly 0.2%, below the five-year average for this time of year.

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