Investing.com - U.S. natural gas futures were lower in North American trade on Monday, moving further away from last week’s one-month high as spring-like temperatures and a widening supply glut weighed.
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 slumped 3.8 cents, or 1.99%, to trade at $1.869 per million British thermal units by 12:45GMT, or 8:45AM ET.
On Friday, natural gas rallied to $1.957, the most since February 18, before turning lower to end at $1.907, down 2.9 cents, or 1.5%.
Despite recent gains, natural gas futures are down nearly 18% so far this year as weak winter heating demand, near-record production and record-high storage levels dragged down prices.
Natural gas prices have been on a downward trend since early 2014, as natural gas producers, especially shale drillers, pulled near record amounts of the fuel out of the ground.
Natural gas storage in the U.S. fell by only 1 billion cubic feet last week, according to the U.S. Energy Information Administration, the smallest drop on record in gas inventories for this time of year.
Total U.S. natural gas storage stood at 2.478 trillion cubic feet, 40.2% higher than levels at this time a year ago and 32.5% above the five-year average for this time of year.
Some market experts warned 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.
Elsewhere on the Nymex, crude oil for delivery in May inched up 20 cents, or 0.49%, to trade at $41.34 a barrel, while heating oil for April delivery tacked on 0.77% to trade at $1.248 per gallon.