Natural gas futures tumble almost 3% in early trade

Investing.com - U.S. natural gas prices fell sharply on Monday, as investors monitored shifting weather forecasts to gauge the strength of demand for the fuel in the near-term.

Natural gas for delivery in August plunged 7.1 cents, or 2.5%, on the New York Mercantile Exchange to trade at $2.769 per million British thermal units during U.S. morning hours.

On Friday, natural gas prices rose 4.1 cents, or 1.46%, to end at $2.840. Futures were likely to find support at $2.696, the low from June 9, and resistance at $2.977, the high from June 17.

Updated weather forecasting models continued to call for higher-than-normal temperatures across most parts of the U.S. in the first half of the week, before a shift to cooler weather pushes readings to near normal across much of Northeast and Midwest late in the week.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.

Meanwhile, the U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 89 billion cubic feet, compared to expectations for an increase of 93 billion and following a build of 111 billion cubic feet in the preceding week.

Supplies rose by 112 billion cubic feet in the same week last year, while the five-year average change is an increase of 87 billion cubic feet.

Total U.S. natural gas storage stood at 2.433 trillion cubic feet as of last week, 42.9% higher than during the same week a year earlier and 1.9% above 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 all of last winter’s unusually strong demand.

The EIA's next storage report slated for release on Thursday, June 25 is expected to show a build of approximately 80 billion cubic feet for the week ending June 19.

Supplies rose by 110 billion cubic feet in the same week last year, while the five-year average change is an increase of 86 billion cubic feet.

Elsewhere on the Nymex, crude oil for delivery in August inched up 19 cents, or 0.31%, to trade at $60.16 a barrel, while heating oil for July delivery tacked on 0.13% to trade at $1.869 per gallon.