US natural gas futures on Wednesday fell to a near nine-week low as less hot weather forecasts for the next two weeks are expected to reduce power demand for air conditioning. After shedding 5 percent on Tuesday, front-month gas futures for September delivery on the New York Mercantile Exchange fell 5.4 cents, or 2.1 percent, to settle at $2.561 per million British thermal units. This was the fifth day in a row of declines for the front-month contact, its longest losing streak since February.
Traders noted the front-month was now down about 15 percent from a recent 14-month high near $3 on July 1 due in part to the mountain of gas in storage and slow but steady production increases as pipelines exit maintenance outages.
Peak demand for power in Texas was expected to hit an all-time high on Wednesday that would top the current record set on Monday as a lingering heat wave baked the state.
Analysts estimated utilities added about 25 billion cubic feet during the week ended August 5. That compares with a withdrawal of 6 bcf in the prior week, builds of 57 bcf in the same week a year earlier and a five-year average of 53 bcf.
Despite smaller-than-normal injections since April, analysts still expect stockpiles to start the winter heating season in November at an all-time high after utilities left record amounts of gas in storage after the mild winter of 2015-2016.