Natural Gas prices are higher this morning, having tumbled 3.8% yesterday to settle at $2.849/MMBtu on mild weather forecasts.
Following a relatively mild spring, temperatures look like staying general normal in much of the US over the coming weeks, according to MDA Weather Services. This comes after speculation had mounted that a hot summer would push natural gas prices higher. A senior analyst analyst at Price Futures Group told Bloomberg:
“If the heat is gonna come, it better get coming in July. If the summer is not that hot, I think you’re going to see downward pressure on prices.”
During summer months natural gas usage normally increases due to the reliance on air conditioning through much of the US. Meanwhile, the mild spring meant that household heating was not used so much, reducing the demand for Natural Gas.
Stockpiles in the US remain above average for this time of year, whilst production is rising following last year’s decline.
Having hit a 4 month low in yesterday’s trading, natural gas prices rallied in Asian markets and early European trading. Natural gas prices are 1.16% higher at time of writing, as investors took advantage of a weakened US Dollar to snap up cheaper positions in dollar-priced commodities.