On Wednesday, natural gas prices fell due to less hot weather and weaker gas usage than expected next week.
Natural gas futures for October delivery declined by -0.60% to $2.66 per million British thermal units on August 30.
The commodity reported slight losses brought by a mixed weather forecast. As a result, the demand for fuel from electricity providers would turn to power air conditioning.
Maxar Technologies states cooler temperatures will fall in the Western US next week. On the other hand, above-normal temperatures would reach Central and Eastern US.
Moreover, natural gas prices continue to be weighed on by robust inventories amid weak heating demand in the milder-than-normal winter. Besides, the past winter’s warm temperatures increased storage in Europe and the US.
Fuel volumes across Europe were 93.00% full on August 27, topping the seasonal average of 80.00% complete this year. Likewise, as of August 18, inventories in the US were 9.50% higher than its five-year seasonal average.
However, higher US electricity output brings positive factors for its demand from utility providers. For instance, the Edison Electric Institute stated its total electricity output rose by 6.30% year-over-year to 92,153 gigawatt hours.
Last Friday, experts reported that the number of active natural gas drilling rigs in America fell to 115 rigs.
Hurricane Idalia Failed to Support Natural Gas
On Tuesday, natural gas contracts in the US were led to report a loss for the month. Hurricane Idalia was expected to bring a slight movement in energy production.
However, the calamity could negatively affect power demand when the region deals with recovery efforts during the storm. Also, Australian workers plan strikes to shake up European natural gas prices.
Moreover, Hurricane Idalia coming towards the Gulf Coast of Florida may bring a bearish effect on prices than bullish results.
According to analysts, the hurricane can have negative impacts as infrastructure damage could weaken gas consumption in generating power. They added that there is still a supply of European liquefied natural gas, decreasing the chances of a shortage.
