Investing.com - Natural gas futures fell towards five month lows on Friday, as demand for the fuel was likely to remain limited after meteorologists predicted mild fall weather in much of the U.S. in the weeks ahead.
On the New York Mercantile Exchange, natural gas for delivery in October dropped 2.7 cents, or 1.04%, to end the week at $2.564 per million British thermal units. A day earlier, futures fell to $2.521, the weakest level since April 29.
For the week, natural gas prices slumped 2.1 cents, or 1.57%, the second straight weekly loss.
Demand for natural gas is expected to be moderate this week as cooler weather moves across the eastern part of the U.S. Meanwhile, weather in the west will be warmer before cooling off as the week progresses.
Summer heat has waned and cooler temperatures beckon with the approach of autumn. Natural gas accounts for about a quarter of U.S. electricity generation.
Data released Thursday showed that U.S. natural gas supplies rose much more than expected last week.
According to the Energy Information Administration, natural gas storage increased by 106 billion cubic feet, above forecasts for a gain of 96 billion cubic feet. Supplies rose by 96 billion cubic feet in the same week last year, while the five-year average change is an increase of 83 billion cubic feet.
Total U.S. natural gas storage stood at 3.440 trillion cubic feet, 15.7% higher than during the same week a year earlier and 4.5% 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.
The EIA's next storage report slated for release on Thursday, October 1 is expected to show another hefty build of approximately 100 billion cubic feet for the week ending September 25.
That compares with builds of 110 billion cubic feet in the same week last year, while the five-year average change for the week is an increase of 94 billion cubic feet.
Elsewhere on the Nymex, crude oil for November delivery settled at $45.70 a barrel by close of trade on Friday, up 73 cents, or 2.28%, on the week, while heating oil for October delivery rose 2.13% on the week to settle at $1.522 per gallon.