NEW YORK (Dow Jones)--Natural gas futures fell Monday as traders focused on forecasts for cooler weather, looking past the possibility of supply disruptions from Hurricane Irene.
Natural gas for September delivery settled 5.1 cents, or 1.3%, lower, at $3.889 a million British thermal units on the New York Mercantile Exchange.
Futures eased as forecasters looked for easing temperatures in the coming weeks. Predictions over the next six to 10 days pointed to a "significant cool down" compared with previous temperature outlooks, said Jim Ritterbusch, head of the trading advisory firm Ritterbusch and Associates.
"We've seen some bearish weather outlooks through the end of August in key regions," said Matt Smith, analyst at Summit Energy in Louisville, Ky.
Forecasts for cooler temperatures typically weigh on natural gas futures because they typically lead to cutbacks in air-conditioning use, which reduces electricity needs, a major driver of U.S. gas demand.
The forecasts for cooler weather comes on the heels of hot temperatures throughout much of the country this summer, which spurred higher demand and helped maintain a year-over-year storage deficit.
However, gas futures have since given up much of their summer gains, with the peak summer cooling-demand season winding down and signs of economic weakness in the U.S. persisting. Natural gas futures have held below $4 per million British thermal units for nearly a week, after rising to almost $5 in June.
Meanwhile, market participants shrugged off the prospect of supply disruptions from Hurricane Irene. Recent forecasts are now calling for the storm to bear down on Florida's east coast and dodge key production areas on the Gulf of Mexico.
Natural gas futures on Friday rose more than 1.2%, boosted by fears that Irene would head toward the Gulf.