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Natural gas extends losses as forecasts point to warming temps ahead

Published 01/02/2013, 02:05 PM
Updated 01/02/2013, 02:06 PM
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Investing.com - Natural gas futures extended Monday's losses into Wednesday after weather services continued to forecast warmer temperatures for much of the U.S.

On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD3.232 per million British thermal units, down 3.57%.

Earlier this week, weather service provider MDA Weather said that it expected temperatures to warm up in the coming days through the second week of January.

Elsewhere, Commodity Weather Group in Bethesda, Maryland, reported that cooler temperatures across most of the mainland U.S. will thaw and yield to above-normal temperatures from Jan. 7 through Jan. 11, which sent natural gas prices plummeting.

Natural gas futures are very sensitive to weather reports in the U.S. winter.

The U.S. heating season running from November through March sees peak demand for gas.

About half of U.S. households use gas for heating purposes, according to Energy Department data.

Meanwhile, U.S. natural gas storage fell less than expected in the week before last, official data revealed on Friday, though weather forecasts served as the market's chief weather vane.

In a report, the Energy Information Administration said that U.S. natural gas storage fell by 72 billion cubic feet last week to 3.652 trillion cubic feet, less than a decline of 82 billion cubic feet in the preceding week.

Analysts had expected U.S. natural gas storage to fall 76 billion cubic feet last week, though markets focused more on weather forecasts

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were up 1.24% and trading at USD92.96 a barrel, while heating oil for February delivery were up 0.69% and trading at USD3.0526 per gallon.










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