Investing.com - U.S. natural gas prices declined on Wednesday, as market participants looked ahead to fresh weekly information on U.S. gas inventories amid expectations for a modest withdrawal.
On the New York Mercantile Exchange, natural gas for delivery in April shed 4.3 cents, or 1.54%, to trade at $2.743 per million British thermal units during U.S. morning hours. Meanwhile, the May natural gas contract dropped 5.3 cents, or 1.9%, to hit $2.757.
The U.S. Energy Information Administration's next storage report slated for release on Thursday is expected to show a withdrawal of approximately 10 billion cubic feet for the week ending March 20.
Supplies fell by 56 billion in the same week last year, while the five-year average change is a decline of 19 billion cubic feet.
Total U.S. natural gas storage stood at 1.467 trillion cubic feet as of last week, 52.8% above year-ago levels and 13.3% below 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 most of last winter’s unusually strong demand.
On Tuesday, the front-month April contract rallied 5.3 cents, or 1.94%, to settle at $2.786, while the May contract climbed 5.0 cents, or 1.81%, as a cold blast was expected to hit the U.S. Northeast in the coming days.
Updated weather forecasting models showed that a cold front will impact the northern U.S. through March 28, carrying rain and snow, while the rest of the country will enjoy seasonal or higher temperatures.
Despite recent gains, sentiment is likely to remain vulnerable in the near-term as the coldest part of the winter has effectively passed and below-normal temperatures in March mean less than they do in January and February.
Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.
Elsewhere on the Nymex, crude oil for delivery in May inched up 46 cents, or 0.97%, to trade at $47.97 a barrel, while heating oil for April delivery dipped 0.11% to trade at $1.704 per gallon.