Forexpros – Natural gas prices steadied on Wednesday, trading close to a ten-year low as traders speculated whether the commodity’s 18% plunge in the last six trading days was excessive ahead of Thursday’s government report on U.S. gas supplies.
On the New York Mercantile Exchange, natural gas futures for February delivery traded at USD2.495 per million British thermal units during U.S. morning trade, edging 0.16% higher.
It earlier rose by as much as 1.5% to trade at a session high USD2.542 per million British thermal units.
Prices plunged 6.8% on Tuesday to hit USD2.437 per million British thermal units, the lowest since September 4, 2009, when prices fell to a ten-year low of USD2.408.
Natural gas prices have tumbled approximately 18% since January 10, the worst six-day performance since November 2006 as forecasts for warmer-than-normal winter weather in the U.S. and concerns over high inventory levels continued to weigh on the heating fuel.
Winter temperatures in the U.S. have yet to reach levels cold enough to boost demand for the heating fuel. The Commodity Weather Group said Tuesday that this winter has been the third-warmest since 2000 thus far.
Futures have tumbled nearly 31% since the beginning of December. So far in January, prices are approximately 45% lower than a year ago. The natural gas contract has not been this cheap at this time of year since 2002.
Prices held steady as investors took to the sideline ahead of Thursday’s closely-watched U.S. Energy Information Administration’s report on U.S. natural gas stockpiles for the week ended January 13.
Currently, total U.S. natural gas supplies stand at 3.377 trillion cubic feet, up 13.4% compared to the same week a year earlier and 17% above the five-year average for the week.
Analysts recently have been revising upward their estimates for end-winter inventories after mild early-winter weather weighed on withdrawal levels.
Recent estimates range from 2 trillion cubic feet to 2.4 trillion cubic feet. Inventories usually end the winter-heating season at 1.55 trillion cubic feet. The record high for end-winter storage is 2.14 trillion cubic feet set in 1983.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March eased up 0.1% to trade at USD100.95 a barrel, while heating oil for February delivery shed 0.38% to trade at USD3.025 per gallon.
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