Natural-gas futures fell slightly Wednesday despite expectations for warmer weather in the coming weeks that typically boosts demand.
Natural gas for August delivery recently traded down 5.3 cents, or 1.2%, to $4.310 per million British thermal units on the New York Mercantile Exchange.
Futures rose in the previous session on reports of higher temperatures across the country, but this momentum has slowed.
The market is trading sideways, and in recent sessions futures have traded in a range between $4.20 and $4.40. Earlier Wednesday prices were down more than seven cents.
"This is purely a trading affair," said Rich Ilczyszyn, senior market strategist with Lind-Waldock.
Buyers are starting to step into the market as prices have fallen, he said.
Forecaster MDA EarthSat said its six- to 10-day forecast calls for higher temperatures in the central U.S. and lower ones in the West. The strongest heat is expected in Texas and the Southern Plains. More above-normal temperatures are forecast in the 11-to-15-day forecast, with highs in the lower 100s in parts of Texas and Oklahoma.
"We are still viewing the 1-2 week temperature views as the primary driver of price in this market until the tropical storm factor takes on more importance later this month," Ritterbusch & Associates said in a note.
Higher temperatures in the summer tend to increase the burning of natural gas to power air-conditioning.
As natural-gas supplies remain high and there isn't a tropical storm brewing to threaten production, traders are looking ahead to the Energy Information Administration's weekly storage report due Thursday.
A smaller-than-expected build in weekly U.S. inventories reported last week caused prices to rise, but traders pared those gains Friday.
Meanwhile, natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $4.3800/MMBtu, according to IntercontinentalExchange, up 3.7 cents from Tuesday's average. Natural gas for Thursday delivery at Transcontinental Zone 6 in New York traded at $4.8500/MMBtu, up 4.9 cents from Tuesday.