US natural gas futures fell for the second straight session in a row, down 2.3 percent on the heels of a moderate US weather forecast that will likely ease air conditioning use over the next two weeks.
The front contract posted a two-month high of $3.82 on Thursday and finished the week nearly flat, gaining just 0.3 percent after a 4.2 percent rise the previous week. The nearby contract has fallen by 3.2 percent over the last two sessions.
In a report following the decline, Energy Management Institute partner Dominick Chirichella said, “Now that the first day of fall has arrived, the weather is likely to continue on a path toward moderation as cooling-related demand starts to dissipate but heating demand is still not likely to click in just yet.”
According to the CS Monitor:
“Front-month October gas futures on the New York Mercantile Exchange, which expire on Thursday, ended down 8.5 cents at $3.602 per million British thermal units, after trading in a range of $3.596 to $3.681. Some traders said the market seemed to be running out of steam after gaining ground in five of the last six weeks.”
With record-high gas production, lowering temperatures, and decent inventories, some experts believe fuel prices will fall below $3.00 per gallon while natural gas prices will also continue to lessen the hardship for millions of Americans.
Some experts believe colder than normal temperatures in Eastern and Wester states could lead to some overnight heating load.
Energy Information Administration data shows total domestic gas inventories at 3.299 trillion cubic feet. Stockpiles are 5 percent below last year’s record highs but still 0.5 percent above the five-year average.
Storage could take a hit after flooding in Colorado last week caused some production shut-ins.
The EIA expects US gas production in 2013 to hit a record high for a third straight year in a row.
I can’t speak for the rest of the country, but, in my area, gas prices are down by more than $0.40 per gallon.