Natural-gas prices slid on Friday, while capping their biggest weekly gain in more than a month, as weather forecasts pointed to cooler temperatures ahead.
Futures contracts for September delivery fell 1.4% to $2.20 a million British thermal units, but rose 3.8% for the week.
“Increasing heat this weekend and into early next week…however, this heat will be short-lived,” said BAMWX, a weather-consulting firm based in Greenwood, Indiana. There’s “confidence increasing on a notable blast of cooler air to close [next week].”
Despite Friday’s drop, gas prices are in the midst of a rebound. Prices have come up after hitting a more-than three-year low earlier this month, as worries eased of there being too much supply in the market.
On Thursday, futures contracts had jumped 4.2% higher, the biggest one-day gain so far this month, after the Energy Information Administration noted in a weekly report that gas in storage increased by 49 billion cubic feet—well below forecasts for a 61-billion-cubic-foot rise.
“Sweltering temperatures in parts of the Lower-48 drove weekly power generation to the highest level on record and forced gas out of storage caverns in the South Central region,” said analysts at Tudor Pickering.
Now, traders are wagering whether a late-summer cooldown could reduce demand for gas-powered electricity, as homes and businesses turn off air-conditioners.
Elsewhere in energy markets, oil prices edged higher as investors weighed a monthly report from the Organization of the Petroleum Exporting Countries.
West Texas Intermediate—the U.S. benchmark price—climbed 0.7% to $54.87 a barrel, while Brent, the global reference price, added 0.7% to $58.64.
Citing an economic slowdown, OPEC lowered its forecast for growth in oil demand for 2019 to 1.1 million barrels a day, from an estimate of 1.14 million.
“The latest fall in prices was driven by sentiment towards global growth, something OPEC has little influence over, rather than oil market fundamentals,” a report by Capital Economics said.
Oil prices are little changed for the week, after posting wild one-day moves this week. Factors such as concerns of rising U.S. crude stockpiles, weak economic data from major global economies, and threats in the U.S.-China trade war have seesawed the oil market, with prices rising as much as 4% on Tuesday, and falling 3% on Wednesday.
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