On the backs of strong production and low summer demand, the August contract settled at $3.808 per MMBtu. This marks the first month during 2014 that natural gas settled below $4, a 13.5% decline from July’s settle. Below normal temperatures across much of the United States during the month of July has kept demand down for natural gas, typically needed to fuel peaking electric generation. Natural gas production continues to outpace last year which is leading to robust weekly storage injections. The natural gas market typically experiences a decline after the July 4th holiday and with the market gaining confidence that storage will refill to comfortable levels prior to winter, the bulls are finding it difficult to sustain a rally.
