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Natural gas futures lower for second day despite cool weather

Published 11/19/2013, 10:44 AM
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Investing.com - Natural gas futures were lower for the second consecutive session on Tuesday, despite weather forecasting models which pointed to colder than average temperatures in key gas-consuming regions in the U.S. later this week.

On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.606 per million British thermal units during U.S. morning trade, down 0.3%.

Nymex gas prices fell to a session low of USD3.593 per million British thermal units earlier, the weakest level since November 15.

The front-month December contract ended 1.17% lower on Monday to settle at USD3.617 per million British thermal units.

Natural gas futures were likely to find support at USD3.575 per million British thermal units, the low from November 15 and resistance at USD3.704, the high from November 18.

Updated weather forecasting models called for a warm up early next week followed by a blast of bitter cold which pushes into much of the US in early December.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early-winter heating demand.

Traders are also looking ahead to this week's U.S. supply data, speculating that it could show the first storage withdrawal of the winter heating season.

Early withdrawal estimates for Thursday’s data range from 15 billion cubic feet to 41 billion cubic feet, compared to a 36 billion cubic feet draw during the same week a year earlier.

The five-year average change for the week is a decline of 2 billion cubic feet.

Total U.S. natural gas storage stood at 3.834 trillion cubic feet as last week, 2% below last year's unusually high level but 1.5% above the five-year average for this time of year.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January inched up 0.35% to trade at USD94.01 a barrel, while heating oil for December delivery added 0.6% to trade at USD2.939 per gallon.

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