Investing.com - U.S. natural gas prices sold off sharply on Monday, amid speculation the end of the winter heating season will bring warmer temperatures throughout the U.S. and cut into demand for the fuel.
On the New York Mercantile Exchange, natural gas for delivery in June touched an intraday low of $2.492 per million British thermal units, the weakest level since April 13, before trading at $2.499 during U.S. morning hours, down 7.0 cents, or 2.71%.
On Friday, natural gas prices dipped 0.1 cents, or 0.04%, to close at $2.568. Futures were likely to find support at $2.475 per million British thermal units, the low from April 13, and resistance at $2.598, the high from April 24.
Natural gas futures lost 6.1 cents, or 3.91%, last week, as forecasts for near-normal temperatures over the ten days dampened demand for the fuel.
Weather forecasting models saw no significant changes over the weekend, calling for mostly mild weather across the U.S.
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 30 is expected to show a build of approximately 86 billion cubic feet for the week ending April 24.
Supplies rose by 77 billion cubic feet in the same week last year, while the five-year average change is an increase of 55 billion cubic feet.
The EIA said last week that natural gas storage in the U.S. rose by 90 billion cubic feet, above expectations for an increase of 88 billion and following a build of 63 billion cubic feet in the preceding week.
Total U.S. natural gas storage stood at 1.629 trillion cubic feet as of last week, 83.0% above year-ago levels and 5.8% 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 shed 32 cents, or 0.55%, to trade at $56.84 a barrel, while heating oil for June delivery dipped 0.37% to trade at $1.925 per gallon.