Investing.com - Natural gas futures fell to the lowest level in six months on Tuesday, as cooler than expected summer weather was expected to limit demand for the fuel.
On the New York Mercantile Exchange, natural gas for delivery in August hit a session low of $4.165 per million British thermal units, the weakest level since January 13, before trimming losses to last trade at $4.184 during U.S. morning hours, down 0.98%, or 4.2 cents.
Natural gas futures plunged 4.11%, or 18.1 cents, on Monday to settle at $4.225, to cap the biggest one-day drop in four months.
Futures were likely to find support at $4.118 per million British thermal units, the low from January 13 and resistance at $4.356, the high from July 7.
Updated weather-forecasting models called for cooler temperatures across most parts of the heavily-populated Midwest and Northeast regions over the next five days, dampening demand for gas-fired electricity to power air conditioning.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use.
Meanwhile, concerns over tight supplies continued to fade away after weekly supply data released last week showed that utilities in the U.S. added 100 billion cubic feet of gas into storage in the week ended June 20.
The five-year average change for the week is an increase of 68 billion cubic feet.
Total U.S. natural gas storage stood at 1.929 trillion cubic feet as of last week, 25.7% below their level this time last year and 29.1% below the five-year average.
Natural gas stockpiles have grown by 100 or more billion cubic feet for eight consecutive weeks, a record streak since 1994.
This week’s government report due Thursday was expected to show that natural gas storage in the U.S. rose by 92 billion cubic feet in the week ended July 4. The five-year average increase for the period is 72 billion.
Elsewhere on the Nymex, crude oil for delivery in August dipped 0.04%, or 4 cents, to trade at $103.49 a barrel, while heating oil for August delivery inched down 0.41% to trade at $2.902 per gallon.