Natural gas prices fall for second day after two-month high

Natural gas futures prices dip as fall crimps air-conditioning demand. Natural gas prices have risen in five of the past six weeks.

David Smith/AP/File
A natural gas well operated by Northeast Natural Energy is seen in this 2011 file photo. Gas prices, which reached a two-month high last week, have fallen in two days of trading.

Front-month U.S. natural gas futures ended lower for the second straight session on Monday, down 2.3 percent in the face of moderate U.S. weather forecasts for the next two weeks that should finally slow demand for air conditioning.

The front contract, which posted a two-month high of $3.82 on Thursday, finished last week nearly flat, gaining just 0.3 percent following a 4.2 percent rise the previous week. The nearby contract has lost 3.2 percent in the last two sessions.

"Now that the first day of fall has arrived, the weather is likely to continue on a path toward moderation as cooling-related demand starts to dissipate but heating demand is still not likely to click in just yet," Energy Management Institute partner Dominick Chirichella said in a report.

Front-month October gas futures on the New York Mercantile Exchange, which expire on Thursday, ended down 8.5 cents at $3.602 per million British thermal units, after trading in a range of $3.596 to $3.681. Some traders said the market seemed to be running out of steam after gaining ground in five of the last six weeks.

Comfortable inventories, record-high gas production and fading heat as milder autumn weather sets in have stirred doubts among some investors about further upside. In its six-to-10-day outlook, forecaster MDA Weather Services said warm temperatures across northern tier states and seasonal-to-cool readings in the South should continue to limit overall energy demand. But some traders said below-normal temperatures in the East and West this week could trigger some overnight heating load.

Energy Information Administration data on Thursday showed total domestic gas inventories stood at 3.299 trillion cubic feet. Stockpiles were 5 percent below last year's record highs at that time, but 0.5 percent above the five-year average.

Traders said production shut-ins last week due to flooding in Colorado might lead to another light storage build in this week's EIA report. The Thomson Reuters Analytics Group estimates that 0.5 bcf per day may have been shut in last week.

Early injection estimates for Thursday's EIA storage report range from 61 bcf to 75 bcf. Stocks gained 79 bcf during the year-earlier week, while the five-year average increase for that week is 75 bcf.

Baker Hughes data on Friday showed the gas drilling rig count fell by 15 last week to 386 after posting a six-month high the previous week. The rig count has risen in eight of the last 13 weeks, stirring talk that new investment in pipelines and processing plants was allowing producers to pump more gas into an already well-supplied market.

The EIA still expects U.S. gas production in 2013 to hit a record high for the third straight year.

In the ICE cash market, gas for Tuesday delivery at Henry Hub , the benchmark supply point in Louisiana, slipped 4 cents to $3.64, but late Hub differentials firmed to about 1 cent over NYMEX from a 5-cent discount on Friday.

Gas on the Transco pipeline at the New York citygate lost 3 cents to $3.77 on the mild Tuesday outlook, while Chicago was 2 cents lower at $3.72.

Despite the rise in tropical activity this month, there were no significant threats to Gulf of Mexico gas production.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

QR Code to Natural gas prices fall for second day after two-month high
Read this article in
QR Code to Subscription page
Start your subscription today