Natural gas contracts tumbled from a one-month peak in New York as milder weather in the Central US hampered demand for the source of power-plant energy.
Gas dropped as much as 1.3%. Gas stockpiles surged to beat the average for the past five years for the last seven weeks during a seasonal drop in consumption.
“It’s a cooler pattern emerging of very little cooling demand in the midcontinent. A broad swath of the U.S. is going to have very light demand this week and possibly into next week. The fact is, even cool temperatures mean a seasonal rise in electric power demand, which will limit storage injections,” strategist Teri Viswanath of New York-based BNP Paribas told Bloomberg.
On the New York Mercantile Exchange, July-delivery natural gas dropped 2.4 cents or 0.5%, to $4.686 for every million British thermal units as of 1:28 pm. The commodity had touched $4.743 earlier, an intraday high it’s not seen since May 8. The amount of all futures that changed hands in the exchange was 16% under the average of the last 100 days. Gas has rallied 11% in 2014.
MDA Weather Services forecasts that regions of East Coast through Texas and California will experience above-average temperatures from June 14 through June 18. Texas, the West Coast and the Great Lakes region will record warm weather in the five days that will follow.
Surging temperatures will improve demand for natural gas in the middle of June, which might impact negatively on the weekly pumping of gas into inventories, said Dominick Chirichella of the Energy Management Institute in New York.
Elsewhere, crude oil contracts for July delivery added 1.44% to $104.14 per barrel on the Nymex, as Moneycontrol reports. Heating oil futures for July delivery surged 0.86% to $2.8956 for each gallon.
Statistics from the Energy Information Administration shows that power plants account for about 31% of US natural gas use.
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