Forexpros – Natural gas futures fell sharply on Wednesday, giving back the previous day’s gains as mild weather forecasts weighed while investors awaited release of key data on U.S. natural gas inventories on Thursday.
On the New York Mercantile Exchange, natural gas futures for January delivery traded at USD3.561 per million British thermal units during U.S. morning trade, tumbling 2%.
It earlier fell by as much as 2.5% to trade at a daily low of USD3.541 per million British thermal units.
Natural gas futures rallied nearly 2% on Tuesday as markets cheered signs that winter’s peak heating season was approaching.
However, the Commodity Weather Group said earlier that temperatures across the Northeast U.S. states, a major gas-consuming region, were expected to be warmer-than-normal during the first week of December.
Industry weather group MDA Federal offered a similar outlook, saying it continues to expect average temperatures across most of the U.S. in its 11-to-15-day forecast.
“The warm background signals still remain,” the weather group said in a report earlier.
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 25 on Thursday.
Early injection estimates range from 5 billion cubic feet to 31 billion cubic feet. The five-year average stockpile change for the week is a decline of 29 billion cubic feet, according to U.S. Energy Department data.
Supplies fell by 21 billion cubic feet during the same week a year earlier.
U.S. natural gas stockpiles stood at 3.852 trillion cubic feet as of last week, just shy of the all-time high of 3.867 hit in early November.
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 jumped 1.2% to trade at USD100.98 a barrel, while heating oil for January delivery eased up 0.15% to trade at USD3.038 per gallon.
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