Investing.com - U.S. natural gas futures fell to a more than two-week low on Monday, as updated weather forecasting models pointed to spring-like temperatures across most parts of the U.S. in the weeks ahead.
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.
Natural gas for delivery in April on the New York Mercantile Exchange fell to an intraday low of $1.766 per million British thermal units, a level not seen since March 10, before trading at $1.795 by 13:30GMT, or 9:30AM ET, down 1.1 cents, or 0.61%. The more actively-traded May contract eased up 0.2 cents, or 0.11% to $1.884.
The Nymex energy market remained closed Friday in observance of the Good Friday holiday.
Natural gas futures tumbled 10.1 cents, or 5.3%, last week, as a widening supply glut dragged down prices.
Total U.S. natural gas storage stood at 2.493 trillion cubic feet as of last week, according to the U.S. Energy Information Administration, 40.8% higher than levels at this time a year ago and 34.0% 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 2.369 set in 2012.
In the week ahead, market players will be focusing on weekly U.S. storage data on Thursday for fresh supply-and-demand signals. Some analysts believe this week’s report will show another increase in supplies, signaling an unusually early end to the winter heating season.
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 down nearly 22% 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 shed 10 cents, or 0.25%, to trade at $39.36 a barrel, while heating oil for May delivery slumped 1.08% to trade at $1.196 per gallon.