Investing.com - U.S. natural gas prices rebounded from the previous session's steep losses on Tuesday, amid speculation utilities and power generators will switch from coal to natural gas in wake of the recent slide in prices.
On the New York Mercantile Exchange, natural gas for delivery in May touched an intraday low of $2.533 per million British thermal units, the weakest level since April 15, before trading at $2.572 during U.S. morning hours, up 3.5 cents, or 1.4%.
A day earlier, natural gas prices lost 9.8 cents, or 3.72%, to close at $2.536. Futures were likely to find support at $2.491 per million British thermal units, the low from April 15, and resistance at $2.693, the high from April 17.
U.S. natural gas prices have been under heavy selling pressure in recent weeks amid speculation the end of the winter heating season will bring warmer temperatures throughout the U.S. and cut into demand for the fuel.
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.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.
Meanwhile, the U.S. Energy Information Administration's next storage report slated for release on April 23 is expected to show a build of approximately 80 billion cubic feet for the week ending April 17, which would be the most on record for the week.
Supplies rose by 45 billion cubic feet in the same week last year, while the five-year average change is an increase of 46 billion cubic feet.
The EIA said last week that natural gas storage in the U.S. rose by 63 billion cubic feet, above expectations for an increase of 53 billion. Supplies rose by 22 billion cubic feet in the same week last year, while the five-year average change is an increase of 35 billion cubic feet.
Total U.S. natural gas storage stood at 1.539 trillion cubic feet as of last week, 81.7% above year-ago levels and 8.6% below the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have made up for most of last winter’s unusually strong demand.
Elsewhere on the Nymex, crude oil for delivery in June dipped 12 cents, or 0.22%, to trade at $57.76 a barrel, while heating oil for May delivery shed 0.16% to trade at $1.874 per gallon.