Investing.com - U.S. natural gas futures slumped on Wednesday, as market participants looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.
Natural gas for delivery in October on the New York Mercantile Exchange declined 3.5 cents, or 1.3%, to trade at $2.667 per million British thermal units during U.S. morning hours.
A day earlier, gas futures tacked on 1.3 cents, or 0.48% as market players assessed the outlook for U.S. demand and supply levels.
Updated weather forecasting models showed that most parts of the southern and western U.S. will be engulfed by hot temperatures.
However, cooler weather was expected across most parts of the Great Lakes, Northeast and Midwest-regions as the week progresses.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.
The U.S. Energy Information Administration's next storage report due on Thursday is expected to show a build of approximately 87 billion cubic feet for the week ending August 28.
That compares with builds of 69 billion cubic feet in the prior week, 79 billion cubic feet in the same week last year, while the five-year average change for the week was an increase of 60 billion cubic feet.
Natural gas supplies totaled 3.099 trillion cubic feet as of last week, 18.3% higher than during the same week a year earlier and 2.9% 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.
Elsewhere on the Nymex, crude oil for delivery in October eased up 8 cents, or 0.18%, to trade at $45.49 a barrel, while heating oil for October delivery jumped 1.16% to trade at $1.595 per gallon.