Investing.com - U.S. natural gas prices rallied to a seven-week peak on Monday, before turning lower as forecasts for mild weather across the U.S. in the week ahead dampened near-term demand expectations for the fuel.
On the New York Mercantile Exchange, natural gas for delivery in June touched an intraday peak of $2.935 per million British thermal units, a level not seen since March 19, before erasing gains to trade at $2.848 during U.S. morning hours, down 3.2 cents, or 1.13%.
Futures were likely to find support at $2.725 per million British thermal units, the low from May 8, and resistance at $2.935, the session high.
On Friday, natural gas prices soared 14.6 cents, or 5.34%, to close at $2.880 as a bout of technical buying kicked in after prices broke above key resistance levels.
Weather forecasting models called for mostly mild weather across the U.S. over the next ten days. 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.
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 May 14 is expected to show a build of approximately 125 billion cubic feet for the week ending May 8.
Supplies rose by 101 billion cubic feet in the same week last year, while the five-year average change is an increase of 82 billion cubic feet.
The EIA said last week that natural gas storage in the U.S. rose by 76 billion cubic feet, compared to expectations for an increase of 75 billion and following a build of 81 billion cubic feet in the preceding week.
The five-year average gain for the period was an increase of 75 billion cubic feet, while supplies rose by 68 billion cubic feet during the comparable period a year earlier.
Total U.S. natural gas storage stood at 1.786 trillion cubic feet as of last week, 71.1% above year-ago levels and 3.6% 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 tacked on 14 cents, or 0.24%, to trade at $59.54 a barrel, while heating oil for June delivery shed 0.18% to trade at $1.950 per gallon.