Forexpros – bsp;- Natural gas prices slipped lower on Wednesday, approaching a 10 year low, as the commodity struggles for direction prior to Thursday U.S. inventory figures.
On the New York Mercantile Exchange, natural gas futures for February delivery traded at USD2.476 per million British thermal units during late U.S. trade, easing lower by 0.48%.
It earlier climbed by as much as 1.5% to trade at a session high of USD2.542 BTU’s.
Prices plunged 6.8% yesterday to hit the lowest since September, 4th, 2009 when prices made a 10 year low of USD2.408.
Natural gas prices have plunged about 18% since January, 10th, as forecasts for warm winter weather in the U.S. add to high inventory levels.
Winter temperatures in the U.S. have yet to reach levels cold enough to boost demand for the heating fuel. In the Northeast, there have been only four warmer Decembers in the last 117 years, according to the U.S. National Weather Service.
Concerns over elevated inventory levels in the U.S. added to selling pressure. Currently, total U.S. natural gas supplies remain at 3.377 trillion cubic feet, up 13.4% compared to the same week a year over year and 17% higher than the five-year average for the week.
Natural gas futures have collapsed nearly 31% since the beginning of December. To this date in January, prices are approximately 45% lower than a year ago. The natural gas contract has not been this inexpensive during this time for the last decade.
Citibank made clear in a report last week, “In the near term, there appears to be no bottom for the front contract price as it continues to fall on weak seasonal heating demand.”
Investors are awaiting the U.S. government’s report on supplies Thursday.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March climbed 0.08% to trade at USD100.95 a barrel.
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