Forexpros – Natural gas futures fell for the first time in six days on Monday, as investors cashed out of the market to lock in gains from a rally that took prices to an 12-day high earlier in the day.
On the New York Mercantile Exchange, natural gas futures for January delivery traded at USD3.564 per million British thermal units during U.S. morning trade, tumbling 2.74%.
Natural gas prices rose by as much as 1.85% earlier to hit USD3.719 per million British thermal units, the highest price since November 11.
Prices were boosted earlier as momentum carried over from the previous week’s 7% weekly advance amid speculation a recent bout of mild U.S. weather was beginning to give way to cooler temperatures across most parts of the U.S.
However, the sharp jump in prices prompted some investors to sell their position and lock in gains, amid speculation that U.S. natural gas supplies are ample to meet the needs of even an unusually harsh winter.
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.
Global financial service provider Barclays expected prices to remain under pressure in the near-term, citing a U.S. supply glut.
“With inventory levels at record levels, even a cold winter would not put the U.S. gas market on a bullish path,” the lender said in a report.
Meanwhile, the Commodity Weather Group said earlier that the U.S. Northeast was forecast to be warmer-than-normal through this week, while returning to more seasonal weather by this weekend.
In the company’s 1-to-5-day weather outlook, the CWG said that temperatures in the Northeast U.S. states were expected to be a least 8 degrees Fahrenheit (4.4 Celsius) above normal.
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.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in January rallied 2.2% to trade at USD98.89 a barrel, while heating oil for January delivery jumped 1.9% to trade at USD2.996 per gallon.
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