Forexpros – Natural Gas futures prices plummeted, hitting new 28 month lows Monday, as forecasts signal continued warm weather reducing demand for the heating fuel.
On the New York Mercantile Exchange, natural gas futures for February delivery traded at USD2.547 per million British thermal units during late U.S. trade, falling another 0.10%
Prices are trading below the psychologically critical USD3.00 level as bearish sentiment was elevated after the Commodity Weather Group stated earlier that temperatures on the U.S. East Coast will likely remain mild, earlier.
The weather group furthered the bearish environment by explaining that the period between November 1st to January 8th was the third warmest in the last century.
Natural gas futures have closely tracked weather forecasts in recent weeks. Above average temperatures decrease the need for gas fired electricity to heat dwelling and businesses, reducing the demand.
Front month future prices on the NYMEX have dropped in 15 of the last 18 trading sessions. Prices collapsed 12.8% last week alone, the largest drop in natural gas prices since August 2009.
Additional downward pressure on prices is expected after the U.S. Energy Information Administration stated it expects gas inventory to end October, 2012 at an all time record of 3.96 trillion cubic feet, while storage capacity is estimated to be just 4.4 trillion cubic feet.
Futures have plunged almost 29% since December. In January, prices are 42% lower than same time a year ago. .
Elsewhere on the NYMEX, light sweet crude oil futures for February settlement advanced 0.99% to trade at USD99.88 a barrel.
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