Investing.com – Natural gas prices dropped for the second day Friday, on continued warm winter weather forecasts, despite an earlier report indicating significant supply decline last week.
On the New York Mercantile Exchange, natural gas futures for March delivery traded at USD2.64 per million British thermal units during early U.S. trade, slipping 0.36%.
The heating gas traded at a high of USD2.69 per BTU and hit a low of USD2.60 per BTU.
Earlier, the U.S. Energy Information Administration stated in its weekly report that natural gas storage in the U.S. in the week ending January 20 dropped by 192 million cubic feet , after declining by 87 million cubic feet the previous week.
The market shrugged off word earlier in the week of Chesapeake Energy stating it will immediately cut 8% of production and said it will cut its activity in regions that produce only gas in half by the second quarter.
The cutbacks in production are designed to reduce a supply glut in the United States caused by a warm winter season.
In bullish news earlier, The U.S. Energy department cut its estimate for natural gas reserves in the Marcellus shale formation by 66%, citing improved information on supply.
Natural gas rallied almost 18.5% in this week, prior to the selling, in response to the bullish news.
The U.S. National Oceanic and Atmospheric Administration stated last week that it expects the warmer than normal winter temperatures on the East Coast, Midwest and much of the Southwest to continue through mid February adding to the long term bearish sentiment.
David Salmon of Weather Derivatives believes that the eastern U.S. will use 20% less energy for heating next week adding to the bearish natural gas environment.
Meanwhile, Occidental Petroleum announced it will cut back on natural gas drilling due to the low prices and Conoco Phillips agreed by limiting North American natural gas production investments.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March advanced 0.29% to trade at USD99.98 a barrel.
On the New York Mercantile Exchange, natural gas futures for March delivery traded at USD2.64 per million British thermal units during early U.S. trade, slipping 0.36%.
The heating gas traded at a high of USD2.69 per BTU and hit a low of USD2.60 per BTU.
Earlier, the U.S. Energy Information Administration stated in its weekly report that natural gas storage in the U.S. in the week ending January 20 dropped by 192 million cubic feet , after declining by 87 million cubic feet the previous week.
The market shrugged off word earlier in the week of Chesapeake Energy stating it will immediately cut 8% of production and said it will cut its activity in regions that produce only gas in half by the second quarter.
The cutbacks in production are designed to reduce a supply glut in the United States caused by a warm winter season.
In bullish news earlier, The U.S. Energy department cut its estimate for natural gas reserves in the Marcellus shale formation by 66%, citing improved information on supply.
Natural gas rallied almost 18.5% in this week, prior to the selling, in response to the bullish news.
The U.S. National Oceanic and Atmospheric Administration stated last week that it expects the warmer than normal winter temperatures on the East Coast, Midwest and much of the Southwest to continue through mid February adding to the long term bearish sentiment.
David Salmon of Weather Derivatives believes that the eastern U.S. will use 20% less energy for heating next week adding to the bearish natural gas environment.
Meanwhile, Occidental Petroleum announced it will cut back on natural gas drilling due to the low prices and Conoco Phillips agreed by limiting North American natural gas production investments.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March advanced 0.29% to trade at USD99.98 a barrel.