Forexpros – Natural gas prices pared early gains on Monday, pulling back from a two-day high as ongoing concerns about record high supplies and mild early-week temperatures weighed.
On the New York Mercantile Exchange, natural gas futures for March delivery traded at USD2.47 per million British thermal units during U.S. morning trade, shedding 0.82%.
The commodity earlier hit a session high of 2.55 per million BTU and a low of 2.44 per million BTU.
Natural gas prices climbed in early trade, as forecasts for cooler weather in the Northeast and Midwest later this week boosted expectations for additional gas-fired heating demand.
But gas prices failed to hold gains amid ongoing concerns over a supply glut, with production levels running close to all-time highs and inventories likely to end winter at a record high.
Extended weather forecasts have still not show any indications of extreme cold in the coming weeks, adding to concerns that the huge inventory glut could keep prices under pressure throughout 2012.
High gas production levels have been pressuring gas prices in recent years. Monthly gas production reached the 2 billion cubic feet mark seven times last year, a threshold not reached in the preceding 37 years.
Data from the U.S. Energy Information Administration last week showed domestic gas inventories fell by a larger-than-expected 132 billion cubic feet to 2.966 trillion cubic feet, but inventory withdrawals this winter are still approximately 30% below average.
Despite recent declines in the gas drilling rig count and planned production cuts by major producers such as Chesapeake gas prices have continued to struggle close to the decade low of USD2.231 hit two weeks ago.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March was down 0.45% to trade at USD97.39 a barrel.
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