Investing.com - U.S. natural gas futures turned lower in North American trade on Thursday, retreating from seven-week highs after data showed U.S. natural gas supplies in storage fell more than expected last week.
Natural gas for delivery in May on the New York Mercantile Exchange jumped to an intraday peak of $2.028 per million British thermal units, a level not seen since February 11, before trading at $1.974 by 14:47GMT, or 10:47AM ET, down 2.2 cents, or 1.1%. Prices were at around $2.014 prior to the release of the supply data.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended March 25 fell by 25 billion cubic feet, compared to expectations for a decline of 22 billion.
That compares with a build of 15 billion cubic feet in the prior week and a five-year average decline of around 25 billion for this time of year.
Total U.S. natural gas storage stood at 2.468 trillion cubic feet, 40.6% higher than levels at this time a year ago and 34.2% above the five-year average for this time of year.
Some market experts worry that stockpiles at the end of March will hit at an all-time high of around 2.5 trillion cubic feet, topping the end-of-withdrawal-season high of 2.472 set at the end of March in 2012.
A day earlier, natural gas futures tacked on 1.5 cents, or 0.76%, amid increased demand expectations.
Midwestern and Northeastern temperatures are expected to fall below normal into the first week in April amid a late season cold front, while a fast warm-up in the west is expected to drive cooling demand.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on late-winter heating demand.
Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.
The heating season from November through March is the peak demand period for U.S. gas consumption. However, a warmer-than-normal winter due to the El Niño weather pattern has limited the amount of heating days and reduced demand for the fuel.
Natural gas futures are down nearly 22% so far this year as weak winter heating demand, near-record production and record-high storage levels dragged down prices.
Elsewhere on the Nymex, crude oil for delivery in May rose 25 cents, or 0.65, to trade at $38.57 a barrel, while heating oil for May delivery jumped 1.55% to trade at $1.190 per gallon.