Forexpros – Natural gas prices declined for a fourth day on Monday, trading at the lowest level since September 2009 as forecasts for warmer-than-normal winter weather in the U.S. continued to underline the view that gas supplies are more than ample to meet U.S. winter-heating needs.
On the New York Mercantile Exchange, natural gas futures for January delivery traded at USD3.082 per million British thermal units during U.S. morning trade, tumbling 1.46%.
It earlier fell by as much as 1.85% to trade at USD3.050 per million British thermal units, the lowest since September 11, 2009, when futures last traded below the psychologically-important level of USD3.00.
The January natural gas contract has lost nearly 15% since the beginning of December, as record high storage levels in the U.S. and forecasts of warm December weather drove down prices to a 27-month low.
Most weather forecasts continued to point to warmer-than-normal temperatures across most parts of the northern half of the U.S. and the eastern seaboard through December 23.
Natural gas prices have closely tracked weather forecasts in recent weeks. Warmer-than-normal winter temperatures reduce the need for gas-fired electricity to heat homes, dampening demand for natural gas.
Concerns over record-high supply levels in the U.S. also added to the selling pressure. Currently, total U.S. natural gas supplies stand at 3.729 trillion cubic feet, up 5% from a year earlier and a record high for this time of year.
According to global financial service provider Barclays, natural gas prices were expected to remain under pressure in the near-term, as a combination of robust production and tepid demand have led to a supply glut.
The lender said in a report Friday that despite a larger-than-expected draw on inventories in the most recent U.S. report on gas storage, the near-term weather outlook “remains disappointing for those who are waiting for seasonal gas heating demand to strengthen.”
Gas futures typically climb during the winter months, as temperatures fall and demand for heating fueled by natural gas rises. But mild weather coupled with high production levels have kept prices depressed in recent weeks.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February rose 0.7% to trade at USD94.39 a barrel, while heating oil for January delivery jumped 1.1% to trade at USD2.831 per gallon.
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