Investing.com - Natural gas futures came under pressure for the fourth consecutive session during U.S. morning trade on Wednesday, as moderating weather forecasts continued to weigh on demand expectations for the fuel.
On the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD2.430 per million British thermal units during U.S. morning trade, dropping 2.2%.
It earlier fell by as much as 2.65% to trade at USD2.405 per million British thermal units, the lowest since May 9.
Natural gas prices have been on the decline since touching a three-month high of USD2.820 on May 21, losing more than 14%.
Technical traders attributed the downward movement to a shaky technical chart outlook, after the market failed to break above key resistance close to USD2.820 a number of times.
Despite the recent losses, sentiment on the fuel has improved since touching a decade-low of USD1.902 on April 19. Prices are up more than 25% since then, amid indications major North American natural gas producers were cutting back on production.
Speculation that utility providers in the U.S. were switching from pricier coal to cheaper natural gas provided further support over recent weeks.
However, market players noted that sustained prices back above USD2.50 and toward the USD3.00-level likely would inspire some switching back to coal.
Meanwhile, cooler weather forecasts and lower temperatures weighed on the commodity after meteorologists predicted normal or below-normal temperatures in the eastern half of the U.S. from May 30 through June 3.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Average or below-average summer temperatures decrease the need for gas-fired electricity to cool homes, dampening demand for natural gas.
Meanwhile, traders remained concerned over elevated U.S. storage levels. The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 77 billion cubic feet 2.744 trillion cubic feet last week, 38% above the same week a year earlier and 38% higher than the five-year average.
Early injection estimates for Thursday’s storage data range from 63 billion cubic feet to 90 billion cubic feet, compared to last year's build of 89 billion cubic feet. The five-year average change for the week is an increase of 100 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July plummeted 3.15% to trade at USD87.89 a barrel, the lowest since October 24, while heating oil for July delivery tumbled 2.25% to trade at USD2.750 per gallon.
On the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD2.430 per million British thermal units during U.S. morning trade, dropping 2.2%.
It earlier fell by as much as 2.65% to trade at USD2.405 per million British thermal units, the lowest since May 9.
Natural gas prices have been on the decline since touching a three-month high of USD2.820 on May 21, losing more than 14%.
Technical traders attributed the downward movement to a shaky technical chart outlook, after the market failed to break above key resistance close to USD2.820 a number of times.
Despite the recent losses, sentiment on the fuel has improved since touching a decade-low of USD1.902 on April 19. Prices are up more than 25% since then, amid indications major North American natural gas producers were cutting back on production.
Speculation that utility providers in the U.S. were switching from pricier coal to cheaper natural gas provided further support over recent weeks.
However, market players noted that sustained prices back above USD2.50 and toward the USD3.00-level likely would inspire some switching back to coal.
Meanwhile, cooler weather forecasts and lower temperatures weighed on the commodity after meteorologists predicted normal or below-normal temperatures in the eastern half of the U.S. from May 30 through June 3.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Average or below-average summer temperatures decrease the need for gas-fired electricity to cool homes, dampening demand for natural gas.
Meanwhile, traders remained concerned over elevated U.S. storage levels. The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 77 billion cubic feet 2.744 trillion cubic feet last week, 38% above the same week a year earlier and 38% higher than the five-year average.
Early injection estimates for Thursday’s storage data range from 63 billion cubic feet to 90 billion cubic feet, compared to last year's build of 89 billion cubic feet. The five-year average change for the week is an increase of 100 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July plummeted 3.15% to trade at USD87.89 a barrel, the lowest since October 24, while heating oil for July delivery tumbled 2.25% to trade at USD2.750 per gallon.