Natural Gas Futures Sink 4% as Forecasts Turn Milder
Published Jan 31, 2018 09:11AM ET
Natural gas futures sink as forecasts turn milder
Investing.com - Natural gas futures fell sharply on Wednesday, as updated weather forecasting models called for milder weather, which should dampen demand for the heating fuel.
Front-month U.S. natural gas futures tumbled 13.0 cents, or around 4.1%, to $3.065 per million British thermal units (btu) by 9:10AM ET (1410GMT), after hitting a three-week low of $3.022 earlier in the session.
The commodity rose almost 0.9% on Tuesday as traders reacted to a blast of cold weather which upped demand for the heating fuel.
But fresh models released overnight showed that temperatures won't be as cold as previously expected through both the upcoming six- to 10-day and eight- to 14-day periods.
Natural gas prices typically rise during the winter months as colder weather sparks indoor-heating demand. The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, market participants looked ahead to this week's storage data due on Thursday, which is expected to show a draw in a range between 90 and 110 billion cubic feet (bcf) in the week ended Jan. 26.
That compares with a decline of 288 bcf in the preceding week, a fall of 87 bcf a year earlier and a five-year average drop of 160 bcf.
Total natural gas in storage currently stands at 2.296 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.
That figure is 519 bcf, or around 18.4%, lower than levels at this time a year ago and 486 bcf, or roughly 17.5%, below the five-year average for this time of year.
A recent blast of cold weather across parts of the U.S. over the past few weeks has resulted in unusually strong storage withdrawals for natural gas, bringing storage levels to the low end of a five-year range.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.