Natural gas futures ease off 3-week low on bargain buying

Forex Pros – Natural gas futures were up for the first time in three days on Monday, easing off a three-week low, as the previous week’s steep decline created bargain buying opportunities for investors.

On the New York Mercantile Exchange, natural gas futures for July delivery traded at USD4.356 per million British thermal units during U.S. morning trade, gaining 0.37%.

It earlier fell to USD4.279 per million British thermal units, the lowest price since May 26.

Natural gas futures plunged nearly 9.5% last week as prices were pressured by rising U.S. supplies and after Goldman Sachs advised investors to sell their positions and lock-in trading profits. 

However, the sharp decline triggered some bargain buying from traders reluctant to bet that prices would fall further amid a favorable demand outlook.

The Commodity Weather Group said that it expected warmer-than-normal weather across most parts of the U.S. in the upcoming week. 

Weather service provider AccuWeather said that New York was expected to have a high of 86 degrees Fahrenheit (30 Celsius) on June 22, five degrees above normal. The high in Atlanta was expected to reach 94 degrees (34 Celsius), seven degrees above average. 

Industry group Weather Derivatives said that cooling demand in the U.S. was expected to be 10% above normal from June 23 to June 27.

Demand for the fuel tends to rise in the summer as warmer temperatures increase the need for electricity to power air conditioning.

Elsewhere, light sweet crude oil futures for delivery in August dipped 0.31% to trade at USD93.11 a barrel, while heating oil for July delivery fell 0.82% to trade at USD2.9600 per gallon during U.S. morning trade.

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