Forexpros – Natural gas futures fell sharply on Wednesday, giving back some of the previous day’s gains as mild weather forecast across major gas-consuming regions in the U.S. was expected to limit demand for the heating fuel.
On the New York Mercantile Exchange, natural gas futures for December delivery traded at USD3.684 per million British thermal units during U.S. morning trade, dropping 1.62%.
It earlier fell by as much as 1.7% to trade at a daily low of USD3.683 per million British thermal units.
The Commodity Weather Group said in a report released earlier that it expected temperatures across the U.S. Northeast to remain warmer-than-normal through mid-November.
According to the weather group’s one-to-five-day outlook, temperatures in New York and New England were forecast to be 3 to 7 degrees Fahrenheit (1.6 to 3.8 Celsius) above normal during the period.
In addition, industry weather group MDA Federal forecast temperatures in the Northeast U.S. states to rise to 8 to 14 degrees above normal from November 14 to November 18.
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 4 on Thursday.
The report was expected to show that U.S. natural gas inventories rose by 31 billion cubic feet last week. The five-year average stockpile change for the week is an increase of 23 billion cubic feet, according to U.S. Energy Department data. Supplies climbed by 26 billion cubic feet in the same week a year earlier.
Currently, 3.794 trillion cubic feet of natural gas is in storage, 5.6% above the five-year average, while the inventory shortfall relative to last year narrowed to just 0.4%.
U.S. inventories typically increase during the so-called “shoulder season”, the period in autumn after air-conditioning demand falls but before heating begins.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in December tumbled 1.62% to trade at USD95.23 a barrel, while heating oil for December delivery shed 0.45% to trade at USD3.102 per gallon.
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