Natural-gas futures prices were weaker Thursday ahead of an expected larger-than-normal rise in inventory and sluggish near-term demand.
Traders said prices appeared poised for the fifth decline in the past six trading days, after a 10-month low at Wednesday's settlement.
The short-term course will be set by U.S. gas storage data due out at 10:30 a.m. EDT. The Energy Information Administration's survey is expected to show an inventory rise of 91 billion cubic feet occurred in the week ended Sept 16. That's well above year-ago and five-year levels.
Natural-gas futures for October delivery on the New York Mercantile Exchange were 3.3 cents lower at $3.697 per million British thermal units. The contract moved in a range of $3.671 to $3.738/mmBtu since Wednesday's settlement.
The market is pressured by too much supply, weak industrial demand and seasonal doldrums in residential heating or cooling demand, with moderate temperatures forecast into early October.
"Virtually all price drivers of both the supply and demand varieties have converged this week to weigh heavily on natural gas prices," said Jim Ritterbusch, president of Ritterbusch and Associates.
A rise of less than 85 bcf could set the stage for at least a temporary rally in prices, but a storage build of more than 95 bcf would push prices down to $3.60 per mmBtu, Ritterbusch said.
The Federal Reserve's warning on Wednesday of a significant downside risk to the economic outlook, stirred new fears about the prospect for industrial gas demand.
Tropical Storm Ophelia, the 15th named storm in the Atlantic this year, was expected to slowly weaken and move eastward by Puerto Rico by Monday morning, putting it on course to avoid the key U.S. Gulf producing region, National Hurricane Center forecasts show.