Due to limited supply and stronger than usual demand caused by heat waves, the price of Natural Gas has been on the rise for 10 months. The August Nymex contract shed 6.3 cents day/day and settled at $3.637/MMBtu. The prompt month had advanced nine straight sessions prior to Tuesday — a span when robust cooling demand propelled prices. September fell 6.0 cents to $3.608 on Tuesday.
The latest weather outlook is still on par with the expectations, marking a hotter-than-normal temperature in a 15-day timeframe. “Most importantly, hot high pressure is expected to rule most of the U.S. July 17-20 and is likely to carry over to July 21-23 as well to keep weather sentiment bullish.”, stated by NatGasWeather. However, after a hot start this week, heavy rains are to be expected in the South, which will lead to cooler temperatures, thus reducing the demand for natural gas to generate electricity. With the ease in demand, the price of natural gas loses its upward momentum and ended its 10-months rally.
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