Natural gas flat, holding near three-month lows
BY JERRY A. DICOLO
NEW YORK -- Natural gas futures held near flat Monday, pausing at three-month lows as traders scour weather forecasts for signs of fuel usage.
Natural gas for August delivery was recently 0.7 cent higher at $3.572/MMbtu on the New York Mercantile Exchange.
Gas was steady as forecasts continue to show normal temperatures across most of the U.S. and hot weather on the east and west coasts.
Private forecaster Commodity Weather Group LLC said "moderate to much above normal temperatures" are likely over the next six to 15 days along the west coast, while temperatures in the Northeast will likely be hotter than normal for the next 10 days.
The forecasts offered some early support to natural gas prices, which are often driven by electricity demand this time of year. Rising temperatures prompt additional air conditioning by homes and businesses, forcing utilities to burn more fuel for power production.
"For this week, hot temps will linger," said Stephen Schork, head of energy-trading adviser Schork Group.
Still, after falling below the 200-day moving average, a key technical indicator, some market watchers are concerned that any sign of weaker demand could lead to a further slump after data last week signaled flagging fuel use from utilities.
The U.S. Energy Information Administration Friday said power plants cut their consumption of natural gas in April by 22% compared to a year earlier, a sign that rising prices may be weighing on demand.
The data helped continue a skid in gas futures. Prices have fallen in six of the last seven sessions and are down nearly 19% from highs above $4.40/MMBtu in April.
Dow Jones Newswires