Investing.com - U.S. natural gas prices extended sharp losses from the previous session on Tuesday to hit a one-month low as forecasts for mild weather across the U.S. in the weeks ahead dampened demand expectations for the fuel.
Natural gas for delivery in August hit a session low of $2.707 per million British thermal units on the New York Mercantile Exchange, a level not seen since June 8, before trading at $2.716 during U.S. morning hours, down 5.6 cents, or 2.04%.
A day earlier, natural gas prices lost 6.6 cents, or 2.34%, to close at $2.756. Futures were likely to find support at $2.624, the low from June 8, and resistance at $2.787, the high from July 6.
Updated weather forecasting models called for mostly average temperatures across most parts of the U.S. in the next two weeks.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.
Total U.S. natural gas storage stood at 2.577 trillion cubic feet as of last week, 34.6% higher than during the same week a year earlier and 1.1% above 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 all of last winter’s unusually strong demand.
The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 69 billion cubic feet, compared to expectations for an increase of 70 billion and following a build of 75 billion cubic feet in the preceding week.
The EIA's next storage report slated for release on Thursday, July 9 is expected to show a build of approximately 85 billion cubic feet for the week ending July 3.
Supplies rose by 94 billion cubic feet in the same week last year, while the five-year average change is an increase of 75 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in August tumbled $2.38, or 4.49%, to trade at a three-month low of $50.63 a barrel, while heating oil for August delivery sank 3.06% to trade at $1.676 per gallon.