Investing.com - U.S. natural gas futures declined on Thursday morning, turning lower after data showed that natural gas supplies in storage in the U.S. rose broadly in line with market expectations last week.
Natural gas for delivery in October on the New York Mercantile Exchange shed 2.5 cents, or 0.82%, to trade at $3.032 per million British thermal units by 10:35AM ET (14:35GMT). Futures were at around $3.059 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. rose by 52 billion cubic feet in the week ended September 16, matching expectations.
That compared with a gain of 62 billion cubic feet in the preceding week, 105 billion a year earlier and a five-year average build of 83 billion cubic feet.
Total U.S. natural gas storage stood at 3.551 trillion cubic feet, 4.0% higher than levels at this time a year ago and 7.5% above the five-year average for this time of year.
On Wednesday, gas futures surged to a 16-month high of $3.098 after weather reports suggested more heat and high demand for gas-fired power through the end of September.
Despite the recent rally, gains are likely to remain limited as traders react to the reality that higher summer demand for the commodity is coming to an end.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.
But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.
Unless intense late-summer heat boosts demand from power plants, stockpiles could possibly test physical storage limits of 4.3 trillion cubic feet at the end of October.