U.S. natural gas futures edge up 0.9% as weather forecasts cap gains

U.S. natural gas futures edged higher Monday in rangebound trade as milder weather forecasts offset the impact of a U.S.-Iran ceasefire agreement, keeping prices near $3.15 per million British thermal units.

"No days in the current two-week outlook appear as intense as the heat observed late last week, taking some urgency out of the market," Andy Huenefeld of Pinebrook Energy Advisors said in a note.

Nymex natural gas settled at $3.147 per million British thermal units, up 0.9%, after earlier falling as much as 1.2% to $3.082/mmBtu. The U.S.-Iran agreement to end the Middle East conflict had little bearing on domestic gas prices, with the market focused on the loss of weather-driven cooling demand, Gary Cunningham of Tradition Energy said. The remainder of June is now projected to have near-normal temperatures for everywhere east of the Rockies, a sharp reversal from the intense heat observed late last week.

Barring hotter forecast revisions or another bullish catalyst, futures may remain choppy as buyers weigh adequate inventories against the risk of stronger summer demand later in the season, Huenefeld said. The shift in weather patterns has trimmed power-sector demand projections from where they stood last week, removing near-term upside pressure on prices.

Natural gas has traded in a choppy range in recent sessions as the market balances comfortable inventory levels against the potential for stronger summer cooling demand later in the season. The ceasefire in the Middle East, while significant for crude markets, had minimal direct impact on U.S. natural gas given the domestic nature of supply and the current focus on weather-driven demand patterns, Cunningham said.

This article is for informational purposes only and does not constitute investment advice.