Commodity Corner: Natural Gas Falls Below $4
Unimpressive durable goods figures contributed to a 4% drop in the front-month natural gas price Wednesday.
Natural gas for September delivery fell 17 cents to settle at $3.87 per thousand cubic feet after the U.S. Commerce Department reported that new orders for durable goods rose by a modest 0.3% from June to July. Though a departure from the decreases from the two preceding months, the slight gain in orders for big-ticket items reported Wednesday was well below analysts' expectations.
Also placing downward pressure on the natural gas price was the lack of a near-term threat from tropical systems to energy infrastructure in the Gulf of Mexico. Hurricane Danielle, with maximum sustained winds of 85 miles per hour as of late Wednesday afternoon, is out in the open Atlantic Ocean and is not expected to threaten the U.S. However, after the day's floor trading ended, the National Hurricane Center reported that Tropical Storm Earl had formed west of the Cape Verde islands and was moving westward at 16 mph. The storm is expected to reach hurricane strength by Friday afternoon, and the center's five-day forecast projects that it will be centered northeast of Puerto Rico on Monday.
Closer to the U.S., a weak low-pressure system was located in the Western Gulf Wednesday. However, the National Weather Service gave the system only a 10% probability of becoming a tropical cyclone by Friday afternoon.
Natural gas traded between $3.86 to $4.06 Wednesday.
A weakening U.S. Dollar, meanwhile, gave October oil futures a boost Wednesday. Oil settled at $72.52 a barrel, an 89-cent increase from Tuesday, after the greenback lost value against the euro following a government report Tuesday showing a sharp drop in U.S. new home sales. The intraday range for oil was $70.76 to $72.37.
The price of a gallon of gasoline for September delivery gained a penny Wednesday, settling at $1.86 after fluctuating from $1.82 to $1.87.