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U.S. gas futures drop 2% on profit-taking ahead of storage data

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Investing.com -

Investing.com - U.S. natural gas futures fell more than 2% on Wednesday, as investors locked in gains from a recent rally ahead of Thursday's closely-watched supply report.

On the New York Mercantile Exchange, natural gas for delivery in September tumbled 2.45%, or 9.8 cents, to trade at $3.876 per million British thermal units during U.S. morning hours.

A day earlier, natural gas futures surged to $4.020, the most since July 17, before settling at $3.974, up 0.23%, or 0.9. cents.

Futures were likely to find support at $3.826 per million British thermal units, the low from August 5 and resistance at $4.020, the high from August 12.

Natural gas prices have been well-supported in recent sessions as weather patterns called for warmer summer temperatures across much of the U.S. later this week.

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's weekly storage report slated for release on Thursday was expected to show an increase of 81 billion cubic feet in the week ending August 8.

Inventories rose by 70 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 45 billion cubic feet.

Injections of gas into storage have surpassed the five-year average for 16 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 2.389 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 20% from 21.7% a week earlier and down from a record 54.7% at the end of March.

Elsewhere on the Nymex, crude oil for delivery in September shed 0.01%, or 1 cent, to trade at $97.36 a barrel, while heating oil for September delivery advanced 0.75% to trade at $2.866 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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