Natural gas prices drop on bearish U.S. inventory data Supply

 Natural gas prices dropped on Wednesday after data revealed U.S. stockpiles rose more than expected last week.

Natural gas prices drop on bearish U.S. inventory dataSupply data send natural gas prices falling despite U.S. heat wave

On the New York Mercantile Exchange, Natural Gas futures for delivery in June traded at $4.606 per million British thermal units during U.S. trading, down 2.84%. The commodity hit session high of $4.755 and a low of $4.588.

The June contract settled down 1.23% on Wednesday to end at $4.740 per million British thermal units.

Natural gas futures were likely to find support at $4.513 per million British thermal units, the low from April 15, and resistance at $4.825, Wednesday's high.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending May 2 rose by 74 billion cubic feet, above forecasts for an increase of 71 billion cubic feet.

The five-year average change for the week is a build of 58 billion cubic feet.

Total U.S. natural gas storage stood at 1.055 trillion cubic feet. Stocks were 797 billion cubic feet less than last year at this time and 982 billion cubic feet below the five-year average of 2.037 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 473 billion cubic feet below the five-year average, following net injections of 35 billion cubic feet.

Stocks in the Producing Region were 389 billion cubic feet b

elow the five-year average of 844 billion cubic feet after a net injection of 27 billion cubic feet.

Producers would need to add 2.6 trillion to 2.9 trillion cubic feet to storage by November 1 to meet typical winter demand, analysts said.

Elsewhere, updated weather forecasting models called for above-normal temperatures over much of the Midwest and Northeast, as well as the South, which was likely to lower heating demand, though expectations the heat wave will hike air conditioning use cushioned losses.

Spring and fall see the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June were down 0.67% at $100.09 a barrel, while Heating Oil for June delivery were down 0.29% at $2.9190 per gallon.

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