Investing.com – Natural gas futures lost ground for the third consecutive day on Friday, slumping to a three-week low as mild weather forecasts and concerns about growing U.S. inventories continued to dominate market sentiment.
On the New York Mercantile Exchange, natural gas futures for delivery in December settled at USD3.562 per million British thermal units by close of trade on Friday, dropping 5.3% over the week, the second consecutive weekly decline.
Earlier in the day, prices fell to USD3.558 per million British thermal units, the lowest price since October 19.
Milder-than-normal temperatures were expected across the U.S. Northeast and Midwest states, major gas-consuming regions, over the next six-to-ten days, according to meteorologists.
In a report published Friday, industry weather group MDA Federal said, “Overall, the biggest trend is to the warmer side, especially in the eastern states where you've got a lot of the population.”
"There might be a brief break where you get cooler temperatures closer to normal, but right now we're expecting to the warmer side of normal," the report added.
Weather service provider AccuWeather expected temperatures in the Northeast and Midwest to mostly average above-normal from November 14 to November 18, with daytime highs ranging from the high-50s to low-60s degrees Fahrenheit (10 to 15 degrees Celsius).
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late October and early November on heating demand.
Concerns over ample U.S. supplies also added to selling pressure after the U.S. Energy Information Administration said in its weekly supply report on Thursday that natural gas storage in the U.S. rose by 37 billion cubic feet last week.
Analysts had expected U.S. natural gas storage to rise by 31 billion cubic feet. Supplies climbed by 26 billion cubic feet in the same week a year earlier, while the five-year average change is a buildup of 23 billion cubic feet.
Currently, 3.831 trillion cubic feet of gas is in storage, putting it on track to exceed last year's record high of 3.837 trillion cubic feet by next week.
U.S. inventories typically increase during the so-called "shoulder season", the period in autumn after air-conditioning demand falls but before heating begins. But this year's increase, aided by unusually warm temperatures, offers a much larger cushion than in most years as winter approaches.
Wall Street investment bank Morgan Stanley estimated that natural gas prices will average around USD3.85 per million British thermal units next year, citing high U.S. production and inventory levels.
"Growing production has been the key driver of price weakness since 2008, a trend that we expect will continue into 2012," the bank said in a report.
Elsewhere on the Nymex, light sweet crude oil futures for December delivery traded at a 15-week high of USD99.17 a barrel by close of trade on Friday, rallying 4.8% on the week, while heating oil for December delivery climbed 3.2% over the week to trade at USD3.186 per gallon by close of trade Friday.
On the New York Mercantile Exchange, natural gas futures for delivery in December settled at USD3.562 per million British thermal units by close of trade on Friday, dropping 5.3% over the week, the second consecutive weekly decline.
Earlier in the day, prices fell to USD3.558 per million British thermal units, the lowest price since October 19.
Milder-than-normal temperatures were expected across the U.S. Northeast and Midwest states, major gas-consuming regions, over the next six-to-ten days, according to meteorologists.
In a report published Friday, industry weather group MDA Federal said, “Overall, the biggest trend is to the warmer side, especially in the eastern states where you've got a lot of the population.”
"There might be a brief break where you get cooler temperatures closer to normal, but right now we're expecting to the warmer side of normal," the report added.
Weather service provider AccuWeather expected temperatures in the Northeast and Midwest to mostly average above-normal from November 14 to November 18, with daytime highs ranging from the high-50s to low-60s degrees Fahrenheit (10 to 15 degrees Celsius).
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late October and early November on heating demand.
Concerns over ample U.S. supplies also added to selling pressure after the U.S. Energy Information Administration said in its weekly supply report on Thursday that natural gas storage in the U.S. rose by 37 billion cubic feet last week.
Analysts had expected U.S. natural gas storage to rise by 31 billion cubic feet. Supplies climbed by 26 billion cubic feet in the same week a year earlier, while the five-year average change is a buildup of 23 billion cubic feet.
Currently, 3.831 trillion cubic feet of gas is in storage, putting it on track to exceed last year's record high of 3.837 trillion cubic feet by next week.
U.S. inventories typically increase during the so-called "shoulder season", the period in autumn after air-conditioning demand falls but before heating begins. But this year's increase, aided by unusually warm temperatures, offers a much larger cushion than in most years as winter approaches.
Wall Street investment bank Morgan Stanley estimated that natural gas prices will average around USD3.85 per million British thermal units next year, citing high U.S. production and inventory levels.
"Growing production has been the key driver of price weakness since 2008, a trend that we expect will continue into 2012," the bank said in a report.
Elsewhere on the Nymex, light sweet crude oil futures for December delivery traded at a 15-week high of USD99.17 a barrel by close of trade on Friday, rallying 4.8% on the week, while heating oil for December delivery climbed 3.2% over the week to trade at USD3.186 per gallon by close of trade Friday.