Investing.com - Natural gas futures plunged on Monday, touching last week’s ten-year low as sentiment on the heating fuel remained bearish amid forecasts for mild March weather that was expected to limit demand and concerns over record high U.S. inventory levels.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD2.241 per million British thermal units during U.S. morning trade, plunging 3.55%.
It earlier tumbled by as much as 3.75% to trade at USD2.236 per million British thermal units, the lowest since February 2002.
Natural gas prices have declined in eight of the past ten trading sessions on the NYMEX leading up to Monday.
Futures have plunged almost 14% since the beginning of March and are down nearly 25% since the start of 2012 as market sentiment has been dominated by concerns over elevated U.S. storage levels and mild late-winter weather.
Natural gas prices came under pressure after industry weather group MDA EarthSat said earlier that high temperatures are forecast to last until almost April, capping off an abysmal heating season for the natural-gas market.
According to the National Oceanic and Atmospheric Administration, temperatures in the continental U.S. in December through February were the warmest since 2000.
The agency said that the number of heating-degree days, a measure of energy demand, was 11% below the 30-year average for the October to February period.
With less than two weeks to go in the U.S. winter, the surplus of natural gas in inventory is continuing to grow, keeping gas prices on the defensive until summer cooling loads kick in.
Concerns over elevated inventory levels continued to weigh on the commodity. Total U.S. natural gas storage stood at 2.433 trillion cubic feet as of last week, a record high for this time of year and 48% higher than the five-year average.
Some market analysts expect prices to drop even further and test USD2.00 per million British thermal units amid expectations U.S. gas inventories will end the winter at a record high 2.2 trillion cubic feet, well above the previous high of 2.148 trillion set in 1983.
Early withdrawal estimates for next week’s storage data range from a decline of 35 billion cubic feet to 72 billion cubic feet, compared to last year's drop of 60 billion cubic feet and the five-year average decline for the week of 79 billion.
Market participants noted that April is considered a transition month for natural gas.
Futures contracts tend to trade more lightly during spring months because demand for heating is weak and natural gas-fueled power plants have yet to step up production to serve air conditioners.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April dropped 1.1% to trade at USD106.20 a barrel, while heating oil for April delivery fell 0.6% to trade at USD3.243 per gallon.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD2.241 per million British thermal units during U.S. morning trade, plunging 3.55%.
It earlier tumbled by as much as 3.75% to trade at USD2.236 per million British thermal units, the lowest since February 2002.
Natural gas prices have declined in eight of the past ten trading sessions on the NYMEX leading up to Monday.
Futures have plunged almost 14% since the beginning of March and are down nearly 25% since the start of 2012 as market sentiment has been dominated by concerns over elevated U.S. storage levels and mild late-winter weather.
Natural gas prices came under pressure after industry weather group MDA EarthSat said earlier that high temperatures are forecast to last until almost April, capping off an abysmal heating season for the natural-gas market.
According to the National Oceanic and Atmospheric Administration, temperatures in the continental U.S. in December through February were the warmest since 2000.
The agency said that the number of heating-degree days, a measure of energy demand, was 11% below the 30-year average for the October to February period.
With less than two weeks to go in the U.S. winter, the surplus of natural gas in inventory is continuing to grow, keeping gas prices on the defensive until summer cooling loads kick in.
Concerns over elevated inventory levels continued to weigh on the commodity. Total U.S. natural gas storage stood at 2.433 trillion cubic feet as of last week, a record high for this time of year and 48% higher than the five-year average.
Some market analysts expect prices to drop even further and test USD2.00 per million British thermal units amid expectations U.S. gas inventories will end the winter at a record high 2.2 trillion cubic feet, well above the previous high of 2.148 trillion set in 1983.
Early withdrawal estimates for next week’s storage data range from a decline of 35 billion cubic feet to 72 billion cubic feet, compared to last year's drop of 60 billion cubic feet and the five-year average decline for the week of 79 billion.
Market participants noted that April is considered a transition month for natural gas.
Futures contracts tend to trade more lightly during spring months because demand for heating is weak and natural gas-fueled power plants have yet to step up production to serve air conditioners.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April dropped 1.1% to trade at USD106.20 a barrel, while heating oil for April delivery fell 0.6% to trade at USD3.243 per gallon.