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Natural gas prices slide as market preps for spring's arrival

Published 03/11/2014, 12:28 PM
Updated 03/11/2014, 12:31 PM
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Investing.com - Natural gas futures slid on Tuesday as markets began to look towards next week's arrival of spring, which brings milder temperatures in the U.S. and curbs demand for heating.

On the New York Mercantile Exchange, natural gas futures for delivery in April traded at $4.588 per million British thermal units during U.S. trading, down 1.35%. The commodity hit session high of $4.682 and a low of $4.574.

The April contract settled up 0.71% on Monday to end at $4.651 per million British thermal units.

Natural gas futures were likely to find support at $4.558 per million British thermal units, Monday's low, and resistance at $4.732, the Monday's high.

Expectations that sweeping cold fronts will begin to wane, while warmer spring temperatures lie just around the corner sent natural gas prices falling on Tuesday.

Spring and fall see the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Elsewhere, updated weather-forecasting models called for normal to above-normal temperatures across many heavily populated areas in the U.S. in the next three to five days, which also sent prices slumping.

Total U.S. natural gas storage stood at 1.196 trillion cubic feet as of last week, the lowest for this time of year since 2004, following a withdrawal of 152 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April were down 0.66% and trading at $100.45 a barrel, while heating oil for April delivery were down 0.17% and trading at $2.9624 per gallon.

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