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Natural gas futures ease off 6-week high with supply data in focus

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Shutterstock photo - Natural gas futures eased down slightly during U.S. morning hours on Wednesday, as the previous session's rally to a six-week high prompted market players to lock in gains ahead of Thursday's closely-watched supply report.

On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD3.519 per million British thermal units during U.S. morning trade, down 0.3% on the day.

Prices fell by as much as 2.1% earlier in the day to hit a session low of USD3.497 per million British thermal units.

Nymex gas prices rallied to USD3.591 per million British thermal units on Tuesday, the strongest level since January 24, as near-term weather forecasts continued to predict cold temperatures, boosting near-term demand expectations for the heating fuel.

Sentiment on the heating fuel remained upbeat after weather forecasts released earlier showed sharply colder temperatures spreading across the eastern half of the U.S. over the next week.

Natural gas prices have closely tracked shifting weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on late-winter heating demand.

Bullish speculators are betting on the cold weather boosting late-winter demand for the heating fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption. Nearly 50% of all U.S. households use gas for heating.

The strong rally prompted investors to lock in gains. Market analysts have warned that prices remain vulnerable in the near-term as the coldest part of the winter has effectively passed and below-normal temperatures in February and March mean less than they do in January.

Natural gas traders now looked ahead to a closely-watched U.S. government report on natural gas supplies on Thursday.

Early withdrawal estimates range from 120 billion cubic feet to 160 billion cubic feet. Inventories fell by 92 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 107 billion cubic feet.

Total U.S. natural gas storage stood at 2.299 trillion cubic feet as of last week, 16% above the five-year average for this time of year.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April shed 0.6% to trade at USD90.27 a barrel, while heating oil for April delivery dipped 0.1% to trade at USD2.969 per gallon. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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