Natural gas futures fall 2.5% on profit-taking, warm weather

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                  Natural gas futures fell sharply during U.S. morning hours on Monday, as investors booked profits from a furious rally that took prices to a 21-month high in the previous session.

Natural gas prices came under additional pressure as weather forecasts pointed to warmer weather in the coming week, which was expected to limit demand for the fuel.

On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD4.329per million British thermal units during U.S. morning trade, down 2.45% on the day.       

Nymex natural gas prices fell by as much as 2.75% earlier in the day to hit a session low of USD4.317 per million British thermal units. 

The June contract rose to USD4.428 per million British thermal units on Friday, the strongest level since July 22, 2011. 

Nymex gas prices have risen sharply in recent weeks, gaining almost 35% since mid-February, boosted by calls for colder temperatures in major consuming regions across the U.S. that helped tighten the market and ease concerns over bloated inventory levels. 

Total U.S. natural gas storage stood at 1.704 trillion cubic feet as of last week, 32% lower than last year at this time and 4.2% below the five-year average for this time of year. 

Still, some analysts have warned that further gains may be limited with spring's low-demand shoulder season looming.

The latest U.S. National Weather Service six-to 10-day forecast issued over the weekend pointed to above-normal temperatures for nearly the entire country.

Gas use usually hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption. Nearly 50% of all U.S. households use gas for heating.

Early injection estimates for this week’s storage data range from 24 billion cubic feet to 48 billion cubic feet. 

Inventories rose by 43 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 50 billion cubic feet.

Typically this time of year, stockpiles begin to climb as milder spring temperatures curb demand for natural gas. 

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June lost 0.6% to trade at USD87.74 a barrel, while heating oil for May delivery dipped 0.1% to trade at USD2.785 per gallon. 
Courtesy : Investing.com