Investing.com - U.S. natural gas prices sold off on Tuesday, after forecasts called for a late-January warm-up that was expected to limit demand for the heating fuel.
On the New York Mercantile Exchange, natural gas for delivery in February tumbled 23.3 cents, or 7.45%, to trade at $2.894 per million British thermal units during U.S. morning hours, after hitting a daily low of $2.888, the weakest level since January 13.
Nymex floor trading was closed Monday for the Martin Luther King Jr. holiday and transactions will be booked with Tuesday’s for settlement purposes. On Friday, natural gas declined 3.1 cents, or 0.98%, to settle at $3.127.
Futures were likely to find support at $2.795 per million British thermal units, the low from January 13, and resistance at $3.228, the high from January 16.
Updated weather forecasting models for the lower 48 U.S. states called for seasonal temperatures over the next two weeks. The outlook for late-January previously called for a significant cold snap.
Bearish speculators are betting on the near-normal weather reducing winter demand for the heating fuel.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, the U.S. Energy Information Administration's next storage report is slated for release on Thursday, January 22, with analysts expecting a decline of 202 billion cubic feet for the week ending January 16.
Inventories fell by 133 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 176 billion cubic feet. Natural gas storage in the U.S. fell by 236 billion cubic feet last week.
Total U.S. natural gas storage stood at 2.853 trillion cubic feet as of last week, 11.0% above year-ago levels and 3.8% below the five-year average for this time of year.
Natural gas prices are down almost 37% since mid-November as an unusually mild start to winter limited demand while production soared.
Elsewhere on the Nymex, crude oil for delivery in March dropped $1.54, or 3.13%, to trade at $47.59 a barrel, while heating oil for February delivery slumped 1.81% to trade at $1.635 per gallon.