U.S. natural gas futures push higher as Irma loses strength
Investing.com – U.S. natural gas futures started the week on the front foot on Monday, after Hurricane Irma struck the U.S. southeast with less force than once feared, easing worries over a hit to energy demand.
Irma hit Florida on Sunday morning as a dangerous Category 4 storm, the second highest level on the five-step Saffir-Simpson scale, but by afternoon as it barreled up the west coast, it weakened to a Category 2 with maximum sustained winds of 110 miles per hour (177 kph).
It is forecast to weaken to a tropical storm over northern Florida or southern Georgia later Monday.
U.S. natural gas for October delivery was at $2.926 per million British thermal units by 8:45AM ET (1245GMT), up 3.5 cents, or around 1.2%.
It saw a weekly loss of nearly 6% last week as traders began to react to the reality that higher summer demand for the commodity is coming to an end.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.
But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.
Total natural gas in storage currently stands at 3.220 trillion cubic feet, according to the U.S. Energy Information Administration, around 6.2% lower than levels at this time a year ago and mostly in line with the five-year average for this time of year.
Early market expectations for this week’s storage data due on Thursday is for a build in a range between 72 and 83 billion cubic feet in the week ended September 8.
That compares with a gain of 65 billion cubic feet in the preceding week, a build of 62 billion a year earlier and a five-year average rise of 63 billion cubic feet.