Forexpros – Natural gas futures declined for a sixth day on Wednesday, falling to a fresh 13-month low as warm temperatures and concerns about growing U.S. inventory levels continued to drive prices lower.
On the New York Mercantile Exchange, natural gas futures for December delivery traded at USD3.401 per million British thermal units during U.S. morning trade, shedding 0.33%.
It earlier fell by as much as 0.6% to trade at USD3.389 per million British thermal units, the lowest price since October 22, 2010.
Since the beginning of November, natural gas futures have fallen nearly 14%, as mild weather in key gas-consuming regions in the U.S. limited early-season heating demand.
The Commodity Weather Group said on Tuesday that the U.S. East Coast was expected to be warmer-than-normal next week. Temperatures in the region could be 3-to-8 degrees Fahrenheit (1.6 to 4.4 Celsius) higher-than-normal, according to the firm’s six-to-ten-day weather outlook.
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.
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 November 11 on Thursday.
Early injection estimates range from 25 billion cubic feet to 38 billion cubic feet. The five-year average stockpile change for the week is an increase of 10 billion cubic feet, according to U.S. Energy Department data. Supplies declined by 1 billion cubic feet in the same week a year earlier.
Currently, 3.831 trillion cubic feet of gas is in storage, putting it on track to exceed last year’s record high of 3.837 trillion cubic feet by next week.
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 rallied 2.28% to trade at USD101.70 a barrel, while heating oil for December delivery dropped 0.9% to trade at USD3.142 per gallon.
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