Nat-Gas Prices Plunge on Cooler US Weather Outlook

Natural gas prices declined sharply on Thursday due to forecasts of cooler US temperatures, which could reduce demand from electricity providers for air conditioning. The Commodity Weather Group reported a shift away from previously predicted hot weather in the US South over the coming weeks.

The weekly Energy Information Administration (EIA) report showed a 16 billion cubic foot increase in US natural gas inventories for the week ended August 14, exceeding market expectations of 14 billion cubic feet. This is below the five-year average of 29 billion cubic feet.

As of August 14, natural gas inventories were down 0.9% year-over-year but still 6.2% above their five-year seasonal average, indicating sufficient supplies. The EIA also projected that US natural gas storage levels will swell to 3,985 billion cubic feet at the end of October, the highest level in 10 years and 5% above the five-year average.