Forexpros – Natural gas futures were down for the first time in three days on Wednesday, on speculation that the market’s recent rally had accounted for the boost to heating needs and as investors readjusted positions ahead of the expiration of the October contract later in the day.
On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD3.795 per million British thermal units during European morning trade, easing down 0.22%.
The October natural gas contract is due to expire at the end of trading on Wednesday.
Meanwhile, the more actively traded contract for November delivery traded at USD3.860, shedding 0.4%. It earlier fell as much as 0.55% to trade at a daily low of USD3.856 per million British thermal units.
Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Natural gas prices jumped nearly 4.5% in the past two trading session to hit a one-week high of USD3.852 per million British thermal units on Tuesday, as cooler-than-normal temperatures across the eastern U.S. states boosted heating demand expectations for the fuel.
However, the rally prompted some investors to sell their position and lock in gains on speculation that the previous day’s rally had accounted for the boost to cooling needs.
Natural gas traders monitor weather forecasts to determine whether temperatures may boost heating or cooling demand.
Predictions of below-average or above-average temperatures may prompt traders to buy or sell gas futures.
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 September 23 on Thursday.
The report was expected to show that U.S. natural gas inventories increased by 97 billion cubic feet, after adding 89 billion cubic feet in the preceding week.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in November slumped 0.4% to trade at USD84.11 a barrel, while heating oil for November eased up 0.07% to trade at USD2.887 per gallon.
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