Forexpros – Natural gas futures were down for a third day on Tuesday, dropping to the lowest level in more than two weeks as warmer-than-normal winter weather in the U.S. was likely to limit heating demand.
On the New York Mercantile Exchange, natural gas futures for January delivery traded at USD3.443 per million British thermal units during U.S. morning trade, shedding 0.51%.
It earlier fell by as much as 1.25% to trade at USD3.406 per million British thermal units, the lowest since November 18.
The U.S. National Weather Service said earlier that it expected “persistent above-normal temperatures” across most of the U.S. East Coast for the next two weeks.
The NWS added that below-normal temperatures were forecast for the U.S. Southwest region.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late November and early December on heating demand.
Above-normal winter temperatures reduce the need for gas-fired electricity to heat homes, dampening demand for natural gas.
Meanwhile, markets were looking forward to the U.S. Energy Information Administration’s weekly report on U.S. natural gas stockpiles for the week ended December 2 on Thursday.
Early injection estimates for next week’s storage data range from a buildup of 12 billion cubic feet to a drawdown of 34 billion cubic feet.
Currently, total U.S. natural gas storage stand at 3.851 trillion cubic feet, hovering below late November’s all-time high of 3.852 trillion cubic feet.
Stockpiles are 7.3% above the five-year average and 1.1% higher than the same period last year, underlining the view that U.S. gas supplies are sufficient to meet the needs of even an unusually harsh winter.
U.S. inventories typically increase during the so-called “shoulder season”, the period in autumn after air-conditioning demand falls but before heating begins.
But this year’s increase, aided by unusually warm temperatures, offers a much larger cushion than in most years as winter approaches
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January shed 0.3% to trade at USD100.69 a barrel, while heating oil for January delivery rose 0.46% to trade at USD3.006 per gallon.
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