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Natural gas futures edge higher after bouncing off key support level

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Investing.com -

Investing.com - U.S. natural gas futures edged higher on Monday, as investors returned to the market to seek cheap valuations in wake of recent losses.

On the New York Mercantile Exchange, natural gas for delivery in September rose 0.57%, or 2.1 cents, to trade at $3.798 per million British thermal units during U.S. morning hours.

Prices fell to a session low of $3.731 earlier, the lowest since July 28, when prices fell to an eight-month low of $3.725.

Natural gas futures plunged 3.3%, or 13.0 cents, on Friday to end at $3.776 per million British thermal units.

Futures were likely to find support at $3.725 per million British thermal units, the low from July 28 and resistance at $3.906, the high from August 15.

Updated weather-forecasting models predicted cooler-than normal weather over the next week or so, before warmer weather moves in across much of the Central part of the country over the subsequent six-to-10-days.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.

Meanwhile, the U.S. Energy Information Administration said in its weekly report on August 15 that natural gas storage in the U.S. rose by 78 billion cubic feet last week.

The number was below expectations for an increase of 83 billion cubic feet, but higher than the five-year average change for the week of an increase of 45 billion cubic feet.

Injections of gas into storage have surpassed the five-year average for 17 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 2.467 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 18.9% from 20.3% a week earlier and down from a record 54.7% at the end of March.

The EIA's next storage report is slated for release on Thursday, August 21, with analysts expecting a build of 82 billion cubic feet for the week ending August 15.

Inventories rose by 58 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 48 billion cubic feet.

Elsewhere on the Nymex, crude oil for delivery in October slumped 1.56%, or $1.49, to trade at $93.84 a barrel, while heating oil for September delivery dropped 1.25% to trade at $2.812 per gallon.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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