Forexpros – Natural gas futures declined on Tuesday, trading close to the previous session’s two-week low as mild weather forecasts and concerns about rising U.S. inventory levels continued to push prices lower.
On the New York Mercantile Exchange, natural gas futures for December delivery traded at USD3.678 per million British thermal units during U.S. morning trade, slumping 0.49%.
It earlier fell by as much as 1.2% to trade at a daily low of USD3.660 per million British thermal units, hovering just above Monday’s two-week low of USD3.659.
Weather service provider AccuWeather expected temperatures in the Northeast and Midwest to average above-normal from November 7 to November 11, with daytime highs ranging from the mid-50s to low-60s degrees Fahrenheit (10 to 15 degrees Celsius).
Since the beginning of November, natural gas futures have fallen nearly 5.5%, as mild weather in key gas-consuming regions in the U.S. limited early-season heating demand.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late October and early November on heating demand.
Markets were looking forward to the U.S. Energy Information Administration’s weekly report on U.S. natural gas stockpiles for the week ended November 4 on Thursday.
Early injection estimates range from 18 billion cubic feet to 55 billion cubic feet. The five-year average stockpile change for the week is an increase of 23 billion cubic feet, according to U.S. Energy Department data. Supplies climbed by 26 billion cubic feet in the same week a year earlier.
Currently, 3.794 trillion cubic feet of natural gas is in storage, 5.6% above the five-year average, while the inventory shortfall relative to last year narrowed to just 0.4%.
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 December rose 0.76% to trade at USD96.25 a barrel, while heating oil for December delivery added 0.55% to trade at USD3.137 per gallon.
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