Investing.com - Natural gas futures fell sharply on the final trading day of the year on Tuesday, but prices are still on course to post an annual gain of nearly 24%, the biggest yearly increase since 2005.
Trading volumes are expected to remain light as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.347 per million British thermal units during U.S. morning trade, down 1.8%. Nymex February gas futures fell by as much as 1.9% earlier to hit a daily low of USD4.343.
The February contract rallied 1.35% on Monday to end at USD4.427 per million British thermal units.
Natural gas futures were likely to find support at USD4.280 per million British thermal units, the low from December 19 and resistance at USD4.518, the high from December 26.
Nymex natural gas prices have been well-supported in recent weeks, as chilly early winter weather helped drive prices to a two-and-a-half year high of USD4.578 on December 23. Nymex gas prices are on track to end the year with a gain of nearly 24%, the biggest annual increase in eight years.
Market players continued to focus on winter weather forecasts to gauge the strength of heating demand for the fuel. Updated weather forecasting models called for chilly temperatures across the East Coast of the U.S. during the next six-to-ten days.
Colder-than-average winter temperatures increase the need for gas-fired electricity to heat homes, boosting demand for natural gas. The heating season from November through March is the peak demand period for U.S. gas consumption.
U.S. supply levels also remained in focus. Total U.S. natural gas storage stood at 3.071 trillion cubic feet as of last week, approximately 16% below last year's unusually high level and nearly 9% below the five-year average for this time of year.
Early withdrawal estimates for this Friday’s storage data range from 110 billion cubic feet to 150 billion cubic feet, compared to a drop of 126 billion cubic feet during the same week a year earlier.
The five-year average change for the week is a decline of 121 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February shed 0.7% to trade at USD98.59 a barrel, while heating oil for February delivery added 0.35% to trade at USD3.066 per gallon.
Trading volumes are expected to remain light as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.347 per million British thermal units during U.S. morning trade, down 1.8%. Nymex February gas futures fell by as much as 1.9% earlier to hit a daily low of USD4.343.
The February contract rallied 1.35% on Monday to end at USD4.427 per million British thermal units.
Natural gas futures were likely to find support at USD4.280 per million British thermal units, the low from December 19 and resistance at USD4.518, the high from December 26.
Nymex natural gas prices have been well-supported in recent weeks, as chilly early winter weather helped drive prices to a two-and-a-half year high of USD4.578 on December 23. Nymex gas prices are on track to end the year with a gain of nearly 24%, the biggest annual increase in eight years.
Market players continued to focus on winter weather forecasts to gauge the strength of heating demand for the fuel. Updated weather forecasting models called for chilly temperatures across the East Coast of the U.S. during the next six-to-ten days.
Colder-than-average winter temperatures increase the need for gas-fired electricity to heat homes, boosting demand for natural gas. The heating season from November through March is the peak demand period for U.S. gas consumption.
U.S. supply levels also remained in focus. Total U.S. natural gas storage stood at 3.071 trillion cubic feet as of last week, approximately 16% below last year's unusually high level and nearly 9% below the five-year average for this time of year.
Early withdrawal estimates for this Friday’s storage data range from 110 billion cubic feet to 150 billion cubic feet, compared to a drop of 126 billion cubic feet during the same week a year earlier.
The five-year average change for the week is a decline of 121 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February shed 0.7% to trade at USD98.59 a barrel, while heating oil for February delivery added 0.35% to trade at USD3.066 per gallon.