Investing.com - U.S. natural gas prices traded near the lowest level in 12 weeks on Tuesday, as forecasts for mild weather across key consumption regions of the U.S. in the week ahead dampened demand expectations for the fuel.
Natural gas for delivery in October on the New York Mercantile Exchange fell to an intraday low of $2.643 per million British thermal units before trading at $2.662 during U.S. morning hours, down 5.3 cents, or 1.95%.
Updated weather forecasting models showed cooler weather was expected across most parts of the Great Lakes, Northeast and Midwest-regions in the coming days.
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.
According to the U.S. Energy Information Administration, natural gas storage rose by 69 billion cubic feet last week, above expectations for an increase of 59 billion and following a build of 53 billion cubic feet in the preceding week.
Supplies rose by 77 billion cubic feet in the same week last year, while the five-year average change is an increase of 61 billion cubic feet.
Total U.S. natural gas storage stood at 3.099 trillion cubic feet, 18.3% higher than during the same week a year earlier and 2.9% 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, September 3 is expected to show a build of approximately 87 billion cubic feet for the week ending August 27.
That compares with builds of 79 billion cubic feet in the same week last year, while the five-year average change for the week is an increase of 60 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in October lost $1.00, or 2.21%, to trade at $44.22 a barrel, while heating oil for September delivery inched up 0.02% to trade at $1.557 per gallon.