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Investing.com - U.S. natural gas futures fell to a more than one-week low on Wednesday, as traders looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.
The U.S. Energy Information Administration's storage report slated for release on Thursday is expected to show a build of approximately 7 billion cubic feet for the week ending April 1.
That compares with a withdrawal of 25 billion cubic feet in the prior week and a five-year average decline of around 15 billion for this time of year.
Total U.S. natural gas storage stood at 2.468 trillion cubic feet as of last week, according to the U.S. Energy Information Administration, 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.
Natural gas for delivery in May on the New York Mercantile Exchange fell by as much as 2.6% earlier to hit an intraday low of $1.903 per million British thermal units, a level not seen since March 28. It last traded at $1.918 by 13:40GMT, or 9:40AM ET, down 3.6 cents, or 1.84%.
A day earlier, natural gas futures lost 4.4 cents, or 2.2%, as investors cashed out of the market to lock in gains from a recent rally which took prices to a near two-month high earlier this week.
Gas futures soared to $2.074 on Monday, the most since February 12, as updated weather forecasting models pointed to a burst of chillier-than-normal weather across most parts of the U.S. Midwest and Northeast in the first week of April.
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 up almost 19% since hitting a 20-year low of $1.611 in early March. Despite recent gains, prices are still down nearly 10% 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 jumped $1.00, or 2.79%, to trade at $36.91 a barrel, while heating oil for May delivery rallied 2.1% to trade at $1.097 per gallon.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
