Investing.com - Natural gas futures plunged sharply to hit a five-week low on Thursday, after data showed that U.S. natural gas supplies rose more than expected last week.
On the New York Mercantile Exchange, natural gas for delivery in July slumped 4.6 cents, or 1.75%, to trade at $2.588 per million British thermal units during U.S. morning hours, the weakest level since April 30. Prices were at around $2.617 prior to the release of the supply data.
A day earlier, natural gas futures tumbled 6.4 cents, or 2.37%, to close at $2.634 as forecasts for mild weather across the U.S. through mid-June dampened near-term demand expectations for the fuel.
Futures were likely to find support at $2.599 per million British thermal units, the low from June 2, and resistance at $2.845, the high from May 28.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended May 29 rose by 132 billion cubic feet, above expectations for an increase of 121 billion and following a build of 112 billion cubic feet in the preceding week.
Supplies rose by 118 billion cubic feet in the same week last year, while the five-year average change is an increase of 92 billion cubic feet.
Total U.S. natural gas storage stood at 2.233 trillion cubic feet as of last week. Stocks were 751 billion cubic feet higher than last year at this time and 22 billion cubic feet above the five-year average of 2.211 trillion cubic feet for this time of year.
Meanwhile, weather forecasting models called for mostly normal temperatures across the U.S. through mid-June, suggesting little demand for the fuel and paving the way for additional hefty inventory builds in the weeks ahead.
Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.
Elsewhere on the Nymex, crude oil for delivery in July fell $1.39, or 2.33%, to trade at $58.25 a barrel, while heating oil for July delivery declined 2.11% to trade at $1.851 per gallon.