Futures for US natural gas dropped on Tuesday for the first time in the three trading sessions as market players continued monitoring weather forecasts to gauge the demand for fuel awaiting the supply report on Thursday.
According to Nasdaq, October delivery natural gas on the New York Mercentile Exchange dropped 1.39% or 5.4 cents trading at $3.877 per million British thermal units in the morning hours.
Prices were in the range of $3.872 to $3,942 per million British thermal units. The futures are likely to receive support at $3.786, the low of Sep 12 and the resistance at $3.952, the Sep 15 high.
On Monday, natural gas futures rose 1.92% or 7.4 cents ending at $3.931 after the weather forecasting models indicated rising temperatures across majority of southern US states within three or five days, which might boost air conditioning demand.
On September 11, the US Energy Information Administration said in its report that the storage for natural gas was up 92 billion cubic feet last week in the US in comparison to the expected 82 billion cubic feet rise.
Inventories were high by 64 billion cubic feet the same week and 60 billion cubic feet build in the five-year average change.
On Monday, the futures had gained amid cooler weather outlook. Business Week quotes FCStone Latin America LLC energy trading associate as having said, “These people are getting ready for winter. If the chill starts to settle in and temperatures to drop, then injections will slow down.”
Last week, the storage for US natural gas was 2.801 trillion cubic feet, which narrowed the five-year average deficit from 15.4% to 14.2%, down from the March record of 54.7%.
Analysts are expecting storage of 93 billion cubic feet when the EIA releases its weekly report on Thursday, for the week ending Sep 12.
In the same week, there was a 48 billion cubic feet increase in inventories and 71 billion cubic feet for the five-year average change.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org