Forexpros – Natural gas futures were down for a second day on Wednesday, as market participants looked ahead to Thursday’s U.S. government report on natural gas inventories, which was expected to show the first injection of the season.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD2.317 per million British thermal units during U.S. morning trade, shedding 0.75%.
It earlier fell by as much as 0.95% to trade at a two-day low of USD2.308 per million British thermal units.
Natural gas traders were looking forward to the U.S. Energy Information Administration’s closely-watched weekly report on natural gas inventories due Thursday.
The data was expected to show a build of 10 billion cubic feet, the first injection of natural gas for the year, compared to the five-year average decline for the week of 17 billion cubic feet.
Last year, in the March 16 report, the EIA reported gas withdrawals of 20 billion cubic feet, followed by a 7 billion cubic feet injection the following week.
Natural gas prices have been under pressure all winter, as market sentiment has been dominated by concerns over elevated U.S. storage levels and mild weather that has limited demand for the fuel.
Natural gas prices have plunged almost 10% since the beginning of March and are down nearly 21% since the start of 2012.
Prices fell to USD2.208 per million British thermal units on Tuesday, March 13, the lowest since February 2002, amid forecasts for mild March weather and lingering concerns over record high U.S. inventory levels.
Tuesday marked the official start of spring in the U.S. and near-term weather forecasts continue to indicate that demand for the heating fuel will remain weak in the coming weeks.
Latest forecasts from the National Oceanic and Atmospheric Administration show above-normal temperatures covering most of the U.S. into early April, capping off an abysmal heating season for the U.S. natural-gas market.
According to the NOAA, temperatures in the continental U.S. in December through February were the warmest since 2000.
The agency said that the number of heating-degree days, a measure of energy demand, was 11% below the 30-year average for the October to February period.
Some market analysts expect prices to drop even further and test USD2.00 per million British thermal units amid expectations U.S. gas inventories will end the winter at a record high 2.2 trillion cubic feet, well above the previous high of 2.148 trillion set in 1983.
Total U.S. natural gas storage stood at 2.369 trillion cubic feet as of last week, 45% above year-ago levels and 52% higher than the five-year average of 1.562 trillion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in May jumped 1.05% to trade at USD107.20 a barrel, while heating oil for April delivery dipped 0.2% to trade at USD3.230 per gallon.
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