Forexpros – Natural gas prices plunged to a fresh 28-month low for the sixth consecutive day on Tuesday, 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.
On the New York Mercantile Exchange, natural gas futures for February delivery traded at USD2.483 per million British thermal units during U.S. morning trade, plummeting 7%.
It earlier plunged by as much as 7.35% to trade at USD2.474 per million British thermal units, the lowest since September 4, 2009, when prices fell to a ten-year low of USD2.408.
Front-month gas futures prices on the NYMEX have fallen in 16 of the past 19 trading sessions. Prices have tumbled approximately 18% since January 10, the worst six-day performance since November 2006.
Sentiment on the heating fuel remained bearish after the U.S. National Weather Service forecast that temperatures were expected to remain above-normal in the next six-to-ten days across most parts of the U.S. northeast and north-central U.S., the nation’s largest heating markets.
Meanwhile, the Commodity Weather Group said earlier that large portions of the U.S. could see “major warming” though the end of January, with the potential for record high temperatures.
The weather group added that this winter has been the third-warmest since 2000 thus far.
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. also added to selling pressure. 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.
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.
Wall Street lender Citibank said in a report last week that, “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.”
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March climbed 1.1% to trade at USD99.97 a barrel, while heating oil for February delivery eased 0.03% to trade at USD3.028 per gallon.
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