Investing.com - U.S. natural gas futures fell sharply on Tuesday, extending a pullback from the highest level in six weeks as traders began to react to the reality that higher summer demand for the commodity is coming to an end.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.
But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.
U.S. natural gas for October delivery was at $2.995 per million British thermal units by 8:20AM ET (1220GMT), down 7.5 cents, or around 2.5%. It rose to its best level since July 20 at $3.088 last Friday.
Futures did not settle on Monday due to the U.S. Labor Day holiday.
Summer heat has waned and cooler temperatures beckon with the approach of autumn, when gas demand typically slackens and prices fall.
Total natural gas in storage currently stands at 3.155 trillion cubic feet, according to the U.S. Energy Information Administration, around 7.0% lower than levels at this time a year ago and less than 1.0% above the five-year average for this time of year.
Early market expectations for this week's storage data due on Thursday is for a build in a range between 58 and 67 billion cubic feet in the week ended September 1.
That compares with a gain of 30 billion cubic feet in the preceding week, a build of 36 billion a year earlier and a five-year average rise of 58 billion cubic feet.