Investing.com - Natural gas traded higher Monday, bouncing from last week’s 11-year low as bottom fishing buying supported prices and after a heavy storm battered the East Coast over the weekend.
On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD2.067 per million British thermal units during U.S. afternoon trade, surging 2.61%.
The May contract is due to expire at the end of trade on Thursday, April 26.
Prices fell to USD1.902 per million British thermal units on Friday, the lowest since September 26, 2001.
Prices have been hitting a string of fresh 10-year lows below the key USD2.00-level over the past two weeks, as market sentiment has been dominated by ongoing concerns over waning demand and elevated U.S. storage and production levels.
U.S. gas futures lost nearly 3% last week, the fifth consecutive weekly drop.
But prices regained strength on Monday, as traders closed out bets on lower prices after futures moved into oversold territory.
Meanwhile, prices found further support after a late-season storm brought heavy rain and even snow to certain areas of the East Coast over the weekend.
The harsh weather is expected to persist through Monday, boosting near-term demand expectations for the fuel.
Despite the upward move, market participants expect the downtrend in prices to continue, with some traders expecting prices to fall to USD1.850 in the short-term and eventually testing the all-time low of USD1.020 hit in 1992 in the long-term.
Natural gas prices have plunged almost 26% since the beginning of March and are down nearly 36% since the start of 2012.
Weekly storage data from the U.S. released last week showed that natural gas storage in the U.S. rose by 25 billion cubic feet last week, the fifth consecutive seasonal injection of natural gas for the year.
Total U.S. natural gas storage stood at 2.512 trillion cubic feet as of last week, a record high for this time of year and almost 58% higher than the five-year average for this time of year.
Early injection estimates for next Thursday’s storage data range from 35 billion cubic feet to 75 billion cubic feet, compared to last year's build of 35 billion cubic feet. The five-year average change for the week is an increase of 47 billion cubic feet.
Current inventories are at levels they didn't reach last year until the end of June. Concerns are growing over whether enough capacity exists to store the fuel.
If weekly stock builds through October match the five-year average, inventories would top out at 4.594 trillion cubic feet, 12% over peak capacity estimates of about 4.1 trillion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June tumbled 1.09% to trade at USD102.75.