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Natural Gas Falls as Rising Production Offsets Warming Forecasts

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Natural gas traded lower early Tuesday despite warm forecasts as production continues to rise. Gas for June delivery was last seen down $0.04 to US$2.87 per million British thermal units.

Long-term forecasts from the National Weather Service expect nearly all states to see warmer than seasonal temperatures over its six to 14 day outlook, offering some cooling demand amid the spring shoulder season.

However production continues to rise, boosting inventories of the fuel and limiting prices.

"U.S. production continues to trend higher, supported by solid shale output and rising associated gas volumes from oil directed drilling, particularly in the Permian Basin....Combined with relatively mild winter weather, this has left inventories in a comfortable position," TD Economics wrote.

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