Natural gas exchange traded funds strengthened late summer on electricity demand amid the sweltering heat, but it now looks like the warmer weather could persist and dampen demand for heat over winter.
During earlier trading, natural gas futures dipped 4% to $3.650 per million British thermal units after the Energy Information Administration announced that natural gas stockpiles increased by four billion cubic feet last week to 3,877 bcf, reports Dan Strumpt for the Wall Street Journal. Historically, natural gas stockpiles have declined this time of the year.
The milder weather has diminished demand for gas-fired heaters – about half of all U.S. homes use natural gas as a heating source.
“Further out it gets less mild…but there isn’t any bracing cold to rally behind,” said Aaron Calder, analyst at Gelber & Associates in Houston.
MDA EarthSat is projecting temperatures “much above” the normal range for this time of the year over the next six to ten days. While its 11 to 15 day outlook shows lower temperatures, the Northeast could still see above-normal temperatures.