By Sarah Toy
The price of natural gas fell Monday, weighed down by expectations for milder weather in parts of the U.S.
Natural-gas futures tumbled 3.3% to $2.599 per million British thermal units amid predictions of moderating temperatures next week, after a frigid start to November drove prices up earlier this month. Since demand for natural gas tends to climb when people use their heaters in the winter and air conditioners in the summer, changes in weather forecasts can precipitate price swings.
"The lack of significant cold in the upcoming period is bad news for a market dependent on continual, stronger-than-normal heating demand to keep oversupply at bay this winter," wrote analysts at Gelber & Associates in a Monday note.
Natural-gas prices have also been under pressure from strong supply. Stockpiles totaled 3.732 trillion cubic feet during the week ended Nov. 8, about 15% above last year at this time and 0.1% above the five-year average, according to the latest storage data from the Energy Information Administration.
"This market continues to struggle in piecing together a sustainable price rally due largely to a bearish supply side assessment that is seeing some normal supply levels after a couple of years of sizable deficits," wrote analysts at Ritterbusch & Associates in a note Monday.
Stockpiles rose more than expected during the week ended Nov. 8, according to the EIA, with inventories climbing by three billion cubic feet. Analysts surveyed by The Wall Street Journal had predicted a decline of one billion cubic feet, while the five-year average increase was 30 billion cubic feet.
Elsewhere in commodities on Monday, crude futures fell amid investors' concerns of a possible supply glut in 2020 and fears of slowing demand. U.S. crude futures fell 1.6% to $56.80 a barrel, while Brent, the global gauge of prices, fell 1.7% to $62.25 a barrel.
Write to Sarah Toy at email@example.com
(END) Dow Jones Newswires
November 18, 2019 13:48 ET (18:48 GMT)
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