Investing.com - U.S. natural gas futures crashed to seven-week lows on Friday, as updated weather forecasting models called for higher-than-normal temperatures later in February.
Bearish speculators are betting on the mild weather reducing late-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
On the New York Mercantile Exchange, natural gas for delivery in March hit an intraday low of $1.951 per million British thermal units, a level not seen since December 23, before recovering slightly to close at $1.966, down 2.8 cents, or 1.4%.
For the week, natural gas futures lost 14.0 cents, or 4.7%, the second straight weekly decline, as mild winter weather and a widening supply glut weighed.
On Thursday, natural gas futures tumbled 5.2 cents, or 2.54%, after data showed U.S. natural gas supplies in storage fell less than expected last week.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. fell by 70 billion cubic feet, below expectations for a decline of 82 billion.
That compared with draws of 152 billion cubic feet in the prior week, 160 billion cubic feet in the same week last year and a five-year average of around 162 billion.
Total U.S. natural gas storage stood at 2.864 trillion cubic feet, 20.0% higher than levels at this time a year ago and 19.0% above the five-year average for this time of year.
The EIA's next storage report is due on Thursday, February 18. Inventories fell by 110 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 176 billion cubic feet.
Natural gas futures are down nearly 16% so far this year as a warmer-than-normal winter due to the El Niño weather pattern has limited the amount of heating days and reduced demand for the fuel.
Elsewhere on the Nymex, crude oil for March delivery settled at $29.44 a barrel by close of trade on Friday, down $1.53, or 4.69%, on the week, while heating oil for March delivery tacked on 0.97% on the week to settle at $1.069 per gallon.