Investing.com - Profit taking sent natural gas prices falling on Wednesday after investors locked in gains stemming from warm U.S. weather forecasts and sold the commodity for profits.
On the New York Mercantile Exchange, natural gas futures for delivery in September traded at $3.800 per million British thermal units during U.S. trading, down 1.99%. The commodity hit a session low of $3.794, and a high of $3.887.
The September contract settled up 2.24% on Monday to end at $3.877 per million British thermal units.
Natural gas futures were likely to find support at $3.727 per million British thermal units, Monday's low, and resistance at $3.915, Tuesday's high.
Forecasts for seasonably warm weather hovering over the Midwest and eastern U.S. sent natural gas prices climbing to levels ripe for profit taking on Wednesday.
Warm weather this time of year sends natural gas prices rising as investors bet thermal power plants will burn more of the commodity to meet demand for air conditioning.
Still, rain and thunderstorms could cool parts of the country off in the coming days, which also fueled profit taking.
"While this week will be warmer, there will be enough weather systems tracking across the country with cloud cover and cool temperatures to again expect another larger than normal build for next week’s EIA release, albeit leaner than recent builds," Natgasweather.com reported earlier in its Aug. 20-26 forecast.
Supply data remained in focus as well.
The U.S. Energy Information Administration’s weekly storage report slated for release on Thursday is expected to show an increase of 82 billion cubic feet in the week ending Aug. 15.
Inventories rose by 58 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 48 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 17 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 2.467 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 18.9% from 20.3% a week earlier and down from a record 54.7% at the end of March.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were up 0.33% at $93.17 a barrel, while heating oil for September delivery were down 0.10% at $2.8143 per gallon.