Forex Pros - Natural gas futures fell sharply on Monday, dropping to a two-day low after Goldman Sachs said the fuel's recent rally was "unsustainable" and recommended investors sell their positions.
On the New York Mercantile Exchange, natural gas futures for July delivery traded at USD4.663 per million British thermal units during U.S. morning trade, tumbling 1.9%.
It earlier fell by as much as 2.5% to trade at USD4.633 per million British thermal units, the lowest price since June 9.
Earlier in the day, influential Wall Street bank Goldman Sachs advised investors to lock-in trading profits before the gas market reverses, saying that the recent rally in prices was "transient" due to strong cooling-related demand.
The report added that, "demand for natural gas will likely diminish in the coming weeks as the weather normalizes and nuclear power plants come out of maintenance."
Prices have rallied nearly 18% since hitting a low of USD4.077 per million British thermal units on May 20. Prices traded at USD4.964 on June 9, the highest price since August 2010.
Meanwhile, forecasts showing mild weather in the U.S. Northeast next week also weighed on prices.
The Commodity Weather Group said that temperatures will be cooler-than-normal in the Northeastern states through June 17, reducing the need for gas-fired electricity to power air conditioning.
The weather group added that the recent heat wave that engulfed the Eastern U.S. peaked over the weekend, with record high temperatures recorded in Baltimore and Washington DC.
Elsewhere, light sweet crude oil futures for delivery in July dipped 0.39% to trade at USD98.50 a barrel, while heating oil for July delivery added 0.7% to trade at USD3.117 per gallon during U.S. morning trade.
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