Investing.com - U.S. natural gas futures fell towards five month lows on Tuesday, as forecasts for mostly average temperatures across key consumption regions of the U.S. in the week ahead dampened demand expectations for the fuel.
Natural gas for delivery in November on the New York Mercantile Exchange slumped 5.9 cents, or 2.21%, to trade at $2.611 per million British thermal units during U.S. morning hours.
Futures fell to a five-month low of $2.520 on September 24 as demand for the fuel was likely to remain limited after meteorologists predicted mild fall weather in much of the U.S. in the weeks ahead.
Summer heat has waned and cooler temperatures beckon with the approach of autumn. Natural gas accounts for about a quarter of U.S. electricity generation.
According to the Energy Information Administration, natural gas storage in the U.S. increased by 106 billion cubic feet last week, compared to forecasts for a gain of 96 billion cubic feet. Supplies rose by 96 billion cubic feet in the same week last year, while the five-year average change is an increase of 83 billion cubic feet.
Total U.S. natural gas storage stood at 3.440 trillion cubic feet, 15.7% higher than during the same week a year earlier and 4.5% 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 EIA's next storage report slated for release on Thursday, October 1 is expected to show another hefty build of approximately 100 billion cubic feet for the week ending September 25.
That compares with builds of 110 billion cubic feet in the same week last year, while the five-year average change for the week is an increase of 94 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in November rose 73 cents, or 1.65%, to trade at $45.16 a barrel, while heating oil for November delivery jumped 1.4% to trade at $1.522 per gallon.