Investing.com - Natural gas futures moved higher during U.S. afternoon trade Monday, however gains were limited due to inventory overage concerns and post storm issues in the U.S. northeast region.
On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.564 per million British thermal units during U.S. afternoon trade, adding 0.30%.
It earlier fell by as much as 1.35% to trade at a session low of USD3.506 per million British thermal units, the cheapest level since October 18.
Natural gas prices plunged more than 4% Friday, reflecting concerns about demand lost in the Northeast because of Hurricane Sandy, as widespread power outages across the region left millions without electricity.
Power industry officials have said it could take a week or more to restore power throughout the region.
In August 2011, Hurricane Irene caused lengthy power outages in more than a dozen states along the East Coast, curbing power consumption from homes and industrial operations.
Several nuclear reactors in the region remained shut, a week after the storm struck the U.S. East Coast, underlining concerns over a slowdown in demand.
Nuclear outages totaled nearly 27,400 megawatts early Monday, down from 30,100 megawatts out on Friday. The five-year average for this time of year is an outage rate of about 22,200 megawatts.
Meanwhile, market players continued to focus on bloated U.S. inventory levels. Total U.S. gas supplies stood at 3.908 trillion cubic feet, an all-time record that surpasses the previous peak of 3.852 trillion cubic feet reached last November.
Stocks are 3.6% above a year ago and 7.1% above the five-year average for the week.
Early injection estimates for this week’s storage data range from 15 billion cubic feet to 65 billion cubic feet, compared to last year's build of 48 billion cubic feet. The five-year average change for the week is an increase of 36 billion cubic feet.
Market players also monitored weather forecasts for the next six-to-10 days, to gauge the strength of early-Winter heating demand.
Meteorologists said that some cold weather was expected in the Northeast for at least the next few days, before above-normal temperatures return to the region.
The U.S. National Weather Service's six-to-10-day outlook issued on Sunday called for above-normal temperatures for a little more than the eastern third of the nation, and below-normal readings for a little more than the western half.
Natural gas futures often reach a seasonal low in October, when mild weather reduces demand, before recovering in the winter, when heating-fuel use peaks.
The heating season from November through March is the peak demand period for U.S. gas consumption.
From a technical standpoint, natural gas prices could see further losses in the near-term after settling below the key USD3.60-support level on Friday, painting bearish chart signals.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December added 1.10% to trade at USD85.80 a barrel.