Investing.com - Natural gas futures ended Friday’s session sharply lower, as forecasts showing above-normal winter temperatures across key parts of the U.S. in the next two weeks weighed on near-term demand expectations for the heating fuel.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on winter heating demand.
On the New York Mercantile Exchange, natural gas futures for delivery in January tumbled 3.4% Friday to settle at USD3.542 per million British thermal units by close of trade.
The January contract touched a low of USD3.541 per million British thermal units earlier in the session, the weakest level since December 5, when prices fell to a three-week low of USD3.509.
On the week, front-month natural gas prices lost 1.05%, the second consecutive weekly decline.
Forecasts showing mild winter temperatures across most parts of the heavily populated U.S. Northeast in the next two weeks continued to dampen sentiment on the heating fuel.
Weather service provider MDA Weather said Friday that its 11- to 15-day outlook showed cold weather was expected to descend across the U.S. West Coast and Midwest, but it appeared unlikely that the cold would stretch into the East.
The U.S. Northeast is a key gas-heating area. Mild winter temperatures reduce the need for gas-fired electricity to heat homes, reducing demand for natural gas.
Bearish speculators are betting on the warm weather reducing early-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Natural gas prices ended lower Thursday, despite a report from the U.S. Energy Information Administration showing that natural gas supplies fell more-than-expected last week.
The U.S. EIA said in its weekly report that natural gas storage in the U.S. in the week ended November 30 fell by 73 billion cubic feet, compared to expectations for a decline of 64 billion cubic feet.
Inventories fell by 14 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 51 billion cubic feet.
Total U.S. natural gas storage stood at 3.804 trillion cubic feet as of last week, 0.9% below last year’s level, but still 4.6% above the five-year average for this time of year.
Early estimates for this week’s storage data range from a build of 1 billion cubic feet to a drawdown of 27 billion cubic feet.
Inventories fell by 79 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 113 billion cubic feet.
Natural gas futures touched a 14-month high of USD4.001 per million British thermal units on November 26, amid expectations of a cold winter and an increase in heating demand.
But prices fell sharply after forecasters revised their weather outlooks for the period, saying early December temperatures should be warmer-than-normal.
Elsewhere in the energy complex, light sweet crude oil futures for January delivery settled at USD86.01 a barrel by close of trade on Friday, losing 3.3% on the week.
Meanwhile, heating oil for January delivery dropped 4.6% over the week to settle at USD2.921 per gallon by close of trade Friday.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on winter heating demand.
On the New York Mercantile Exchange, natural gas futures for delivery in January tumbled 3.4% Friday to settle at USD3.542 per million British thermal units by close of trade.
The January contract touched a low of USD3.541 per million British thermal units earlier in the session, the weakest level since December 5, when prices fell to a three-week low of USD3.509.
On the week, front-month natural gas prices lost 1.05%, the second consecutive weekly decline.
Forecasts showing mild winter temperatures across most parts of the heavily populated U.S. Northeast in the next two weeks continued to dampen sentiment on the heating fuel.
Weather service provider MDA Weather said Friday that its 11- to 15-day outlook showed cold weather was expected to descend across the U.S. West Coast and Midwest, but it appeared unlikely that the cold would stretch into the East.
The U.S. Northeast is a key gas-heating area. Mild winter temperatures reduce the need for gas-fired electricity to heat homes, reducing demand for natural gas.
Bearish speculators are betting on the warm weather reducing early-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Natural gas prices ended lower Thursday, despite a report from the U.S. Energy Information Administration showing that natural gas supplies fell more-than-expected last week.
The U.S. EIA said in its weekly report that natural gas storage in the U.S. in the week ended November 30 fell by 73 billion cubic feet, compared to expectations for a decline of 64 billion cubic feet.
Inventories fell by 14 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 51 billion cubic feet.
Total U.S. natural gas storage stood at 3.804 trillion cubic feet as of last week, 0.9% below last year’s level, but still 4.6% above the five-year average for this time of year.
Early estimates for this week’s storage data range from a build of 1 billion cubic feet to a drawdown of 27 billion cubic feet.
Inventories fell by 79 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 113 billion cubic feet.
Natural gas futures touched a 14-month high of USD4.001 per million British thermal units on November 26, amid expectations of a cold winter and an increase in heating demand.
But prices fell sharply after forecasters revised their weather outlooks for the period, saying early December temperatures should be warmer-than-normal.
Elsewhere in the energy complex, light sweet crude oil futures for January delivery settled at USD86.01 a barrel by close of trade on Friday, losing 3.3% on the week.
Meanwhile, heating oil for January delivery dropped 4.6% over the week to settle at USD2.921 per gallon by close of trade Friday.