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Natural Gas
2.96

Cooler start to summer is crushing natural gas prices

Written by Pattie Domm

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Natural gas prices dropped Monday on updated forecasts for a cooler early summer across the Midwest and Northeast, meaning utility customers will use a lot less air conditioning.

The natural gas industry typically sees a surge in demand in summer months as utilities meet increased power demand from air conditioning by consumers and businesses. Natural gas futures for July were trading at $2.89 per Mmbtu, a decline of 4.5 percent.

“When you look at basically Chicago to Boston in the next two weeks, you don’t seen any hot weather,” said Gene McGillian, manager, market research at Tradition Energy.

“We have the next two weeks in June, not hot, and you’re actually seeing a little bit of July that’s not hot,” said McGillian. He noted that there is still very hot weather in Texas and other parts of the south, but a big portion of the U.S. is cooler.

“The last week of June temperatures in the New York area, you’re going to have a hard time getting above 80 degrees. Good for folks, but bad for the bulls. You really need early season cooling demand. There’s a lot of bulls in this market on the premise we would have a hot start to the summer,” said John Kilduff of Again Capital.

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Written by Pattie Domm

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