Investing.com - U.S. natural gas futures extended its sharp losses from the prior session on Tuesday to hit a five-month low as updated weather forecasts predicted that below normal temperatures across the U.S. could persist through the first half of August.
U.S. natural gas for September delivery was at $2.766 per million British thermal units by 9:40AM ET (1340GMT), down 2.8 cents, or around 1%. It fell to its lowest since March 2 $2.768 earlier in the session.
Prices saw a drop of roughly 2% on Monday amid bearish weather forecasts.
A weather system with cooling will linger over the East with showers and thunderstorms through August 5, resulting in comfortable temperatures.
A fresh weather system will arrive over the central, southern, and eastern U.S. the following week, resulting in light demand.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on summer cooling demand.
Nearly 50% of all U.S. households use gas for cooling.
Total natural gas in storage currently stands at 2.990 trillion cubic feet, according to the U.S. Energy Information Administration, 9.2% lower than levels at this time a year ago but 3.7% 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 17 and 27 billion cubic feet in the week ended July 28.
That compares with a gain of 17 billion cubic feet in the preceding week, a withdrawal of 6 billion a year earlier and a five-year average rise of 44 billion cubic feet.