Natural Gas Slide to 7-Month Low on Forecasts for Cool Weather

Jul 21, 2014 9:25 am ET

July 21 (Bloomberg) -- Natural gas futures slipped in New York to the lowest price in more than seven months as meteorologists predicted mild weather, which would curtail demand from power plants and help narrow a stockpile deficit.

Temperatures may be average or below normal in the eastern half of the U.S. through Aug. 4, according to Commodity Weather Group LLC. Injections of gas into storage have surpassed the five-year average for 13 consecutive weeks. Inventories were 26 percent below the five-year average in the week ended July 11, compared with 55 percent at the end of March.

“We’re seeing some cool weather on the East Coast in the 10-day forecasts,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “We’ve had some pretty big storage numbers that have been leaning on prices.”

Natural gas for August delivery fell 7.1 cents, or 1.8 percent, to $3.88 per million Btu at 9:19 a.m. on the New York Mercantile Exchange. Volume for all futures traded was 80 percent above the 100-day average. Gas dropped to $3.844 per million British thermal units in intraday trading, the lowest since Nov. 27. Prices are down 8.3 percent this year.