“It looks like the weather is going to moderate a little, finally,” said Tom Saal, senior vice president of energy trading at INTL Hencorp Futures LLC in Miami. “We have an abundance of supply. The market is still pretty weak.”

Natural gas for September delivery fell 4.9 cents, or 1.7 percent, to $2.828 per million British thermal units at 9:59 a.m. on the New York Mercantile Exchange. It declined earlier to $2.801, the lowest intraday price since July 18. The futures are down 5.4 percent this year, after falling 36 percent to $1.902 on April 19, the lowest intraday price since January 2002.

Eoin Treacy's view The USA's drought has contributed to a surge in prices for grains, beans, lumber and natural gas. As conditions ease, upward pressure on commodity prices may also moderate and some evidence of this is observable in a loss of momentum particularly among agriculture prices.

Natural gas prices benefitted from the weather but short covering was also a factor as leveraged trades were unwound. An additional consideration is that a number of traders were also playing the spread between oil and gas. As oil has rebounded this may have contributed to recent pressure on natural gas prices. Henry Hub prices have now pulled back to test the progression of higher reaction lows and will need to find support relatively soon if recovery potential is to remain credible.