(RTTNews) - Natural gas prices continued to drop sharply lower on Wednesday and extended a multi-month low. August natural gas closed at $10.07, down 33.5 cents on the day. Prices fell as low as $9.661, the lowest level for natural gas since early April.
Traders await the release of natural gas inventory data on Thursday morning. Overall, natural gas has dropped in each of the last seven sessions. Prices have fallen by more than $1.90 from the closing level of July 14.
Natural gas followed the lead of crude oil, which fell below $125 a barrel. Crude oil continued its fall as traders generally ignored another decline in weekly inventories. Light sweet crude for August delivery closed at $124.44, down $3.98 for the session. Prices touched as low as $124.22 in mid-afternoon trading, its lowest level since the early part of June.
The latest inventory report indicated crude oil inventories decreased by 1.6 million barrels in the week ended July 18, according to the weekly report. Experts were calling for a drop of anywhere from 400,000 to 1.9 million barrels. However, gasoline inventories increased by 2.9 million barrels last week and distillate fuel inventories increased by 2.4 million barrels.
Meanwhile, Hurricane Dolly is not expected to cause any lasting damage to the crude oil refineries in the Gulf of Mexico. The storm strengthened to a Category 2 hurricane and hit near the Texas/Mexico. The storm season has yet to cause a major upward movement in energy prices this year.
On the economic front, the Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending July 18 Wednesday morning. The Market Composite Index, a measure of mortgage loan application volume, was 489.6, a decrease of 6.2 percent on a seasonally adjusted basis from 522.2 one week earlier. On an unadjusted basis, the Index decreased 6.1 percent compared with the previous week and was down 19.6 percent compared with the same week one year earlier.
In the afternoon, traders considered the release of the Beige Book in the afternoon. The Federal Reserve's report indicated the U.S. economy slowed but price pressure has increased over the past six weeks
Gold plunged again on Wednesday as crude oil's continuing decline reduced the precious metal's hedge appeal. August gold moved to $925.50, down $23 on the session. The precious metal hit as low as $921.70 earlier in the day, marking a two-week low.
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