Investing.com - U.S. natural gas futures plunged on Monday, as forecasts calling for less cold weather over the next two weeks weighed. Forecasts originally called for cold winter weather during the period.
Bearish speculators are betting on the mild weather reducing 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 for delivery in March on the New York Mercantile Exchange sank 14.3 cents, or 6.2%, to trade at $2.155 per million British thermal units by 14:40 GMT, or 9:40AM ET.
Prices surged 11.6 cents, or 5.32%, on Friday to hit a three-week high of $2.315, as winter cold and shrinking inventories buoyed prices.
Natural gas storage in the U.S. fell by 211 billion cubic feet last week, according to the U.S. Energy Information Administration, the most since February 2015 and compared to expectations for a decline of 207 billion.
That compared with draws of 178 billion cubic feet in the prior week, 112 billion cubic feet in the same week last year and a five-year average of 174 billion.
Total U.S. natural gas storage stood at 3.086 trillion cubic feet, 17.2% higher than levels at this time a year ago and 14.0% above the five-year average for this time of year.
The EIA's next storage report slated for release on Thursday, February 4 is expected to show a withdrawal of approximately 200 billion cubic feet for the week ending January 29.
Inventories fell by 115 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 178 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in March dropped $1.09, or 3.23%, to trade at $32.52 a barrel, while heating oil for March delivery slumped 2.4% to trade at $1.051 per gallon.