Commodity Corner: East Coast Heat, Atlantic Storms Boost Gas
Above-normal temperatures in the Eastern U.S. and increasing storm activity in the Atlantic gave natural gas futures a boost Monday.
Natural gas ended the day at $3.81 per thousand cubic feet, a 16-cent improvement from Friday's settlement price, thanks in part to unseasonably warm temperatures along the Eastern Seaboard. According to the National Weather Service, a high-pressure system parked over the Eastern U.S. should allow temperatures to reach the 90s throughout the region through mid-week. Demand for electricity to power air conditioners should lessen later in the week as a cold front moves into to the region. As of Monday afternoon, the National Hurricane Center was unable to determine what portion of the East Coast might be directly affected by Hurricane Earl. The major hurricane was packing maximum sustained winds of 125 miles per hour.
Although Earl is not expected to affect oil an gas infrastructure in the Gulf of Mexico, traders were watching a new system approximately 900 miles east of the Lesser Antilles. The National Hurricane Center stated Monday afternoon that it expects the low-pressure system to become a tropical cyclone within 48 hours.
The natural gas futures price fluctuated between $3.69 and $3.85.
Front-month crude oil retreated 47 cents Monday to settle at $74.70 a barrel. The decline stems from uneasiness about government economic data slated for release this week. On Monday, the U.S. Commerce Department reported that personal income increased 0.2% in July but that real disposable income fell by 0.1%. Also, the government agency announced that real personal consumption expenditures rose by 0.2% last month and at a 1.3% annual rate from their second-quarter average. Consumer spending represents 70% of U.S. gross domestic product.
The intraday range for oil was $74.17 to $75.58.
September gasoline futures slipped by two cents Monday, settling at $1.93 a gallon. Gasoline traded from $1.93 to $1.97.
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