Investing.com – U.S. natural gas futures fell sharply on Monday, with trading volumes likely to remain light as U.S. markets remained closed for Memorial Day.
for July delivery sank 8.3 cents, or around 2.5%, to $ 3.227 per million British thermal units by 8:55AM ET (1255GMT).
The latest U.S. weather model called for mild temperatures over the next two weeks, which should dampen natural gas demand during that time.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on spring 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.
Nearly 50% of all U.S. households use gas for heating.
Total natural gas in storage currently stands at 2.444 trillion cubic feet, according to the U.S. Energy Information Administration, 13.2% lower than levels at this time a year ago but 9.9% above the five-year average for this time of year.
Market participants looked ahead to due on Thursday, which is expected to show a build in a range between 70 and 80 billion cubic feet in the week ended May 26.
That compares with a gain of 75 billion cubic feet in the preceding week, an increase of 82 billion a year earlier and a five-year average rise of 97 billion cubic feet.
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