U.S. natural gas prices tumbled on Monday, as forecasts for the next two weeks turned milder, dampening near-term demand expectations for the cooling fuel.

Natural gas for delivery in August on the New York Mercantile Exchange slumped 7.2 cents, or 2.49%, to trade at $2.798 per million British thermal units during U.S. morning hours.

Futures were likely to find support at $2.776, the low from July 17, and resistance at $2.944, the high from July 17.

Natural gas came under pressure as milder temperatures were expected to spread across most parts of the U.S. Northeast in the coming days, after a heat wave swept through much of the country last week.

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 August natural gas contract rose 5.4 cents, or 3.61%, last week, as hotter-than-normal summer temperatures increased the need for gas-fired electricity to cool homes, boosting demand for natural gas.

Natural gas accounts for about a quarter of U.S. electricity generation.

© Reuters.  US natural gas futures slip early as forecasts turn milder

According to the U.S. Energy Information Administration, natural gas storage in the U.S. rose by 99 billion cubic feet last week, compared to expectations for an increase of 95 billion and following a build of 91 billion cubic feet in the preceding week.

Supplies rose by 105 billion cubic feet in the same week last year, while the five-year average change is an increase of 71 billion cubic feet.

Total U.S. natural gas storage stood at 2.767 trillion cubic feet, 30.9% higher than during the same week a year earlier and 2.7% 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.