Investing.com - U.S. natural gas prices slumped to the lowest level in more than five weeks on Tuesday, as forecasts for cooler weather across key consumption regions of the U.S. in the week ahead dampened demand expectations for the fuel.
Natural gas for delivery in September on the New York Mercantile Exchange fell to an intraday low of $2.682 per million British thermal units, the weakest level since July 9, before trading at $2.697 during U.S. morning hours, down 3.1 cents, or 1.12%.
A day earlier, natural gas prices lost 7.3 cents, or 2.61%, to close at $2.728 after updated forecasting models showed that a strong cool weather system with showers and thunderstorms will strengthen over the north-central U.S. the next few days.
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.
According to the U.S. Energy Information Administration, natural gas storage stood at 2.977 trillion cubic feet as of last week, 2.8% 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.
Data last week showed that natural gas storage in the U.S. rose by 65 billion cubic feet, above expectations for an increase of 55 billion.
That compared with builds of 32 billion cubic feet in the prior week, 79 billion cubic feet in the same week last year, while the five-year average change for the week was an increase of 48 billion cubic feet.
The EIA's next storage report slated for release on Thursday, August 20 is expected to show a build of approximately 70 billion cubic feet for the week ending August 14.
Supplies rose by 86 billion cubic feet in the same week last year, while the five-year average change is a build of 54 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in October inched up 9 cents, or 0.21%, to trade at $42.50 a barrel, while heating oil for September delivery dipped 0.41% to trade at $1.548 per gallon.