Investing.com - U.S. natural gas prices resumed their decline on Tuesday, one day after scoring their biggest one-day percentage gain in 11 months as forecasts predicted a return to cool weather in the Midwest later this month.
Bullish speculators wagered that the cool winter weather will increase demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Natural gas for delivery in January on the New York Mercantile Exchange shed 3.8 cents, or 2.01%, to trade at $1.873 per million British thermal units during U.S. morning hours.
A day earlier, natural gas soared 14.4 cents, or 8.15%, after updated weather forecasting models pointed to cooler temperatures across the central U.S. in the last week of December, following a warm spell which took prices to the lowest level since March 1999 last week.
Prices fell to a 17-year low of $1.684 on December 18, as mild pre-winter weather took a toll on prices.
Natural gas typically rises ahead of the winter as colder weather sparks heating demand, yet an unusually mild start to winter due to the El Niño weather phenomenon has limited the amount of heating days.
Prices of the fuel are down nearly 37% so far this year, the biggest annual decline since 2006, as weak demand and healthy stockpiles weighed.
Total U.S. natural gas storage stood at 3.846 trillion cubic feet as of last week, 14.1% higher than levels at this time a year ago and 8.4% above the five-year average for this time of year.
The U.S. Energy Information Administration's next storage report slated for release on Thursday, December 24 is expected to show a withdrawal of approximately 45 billion cubic feet for the week ending December 18.
That compares with a drawdown of 34 billion cubic feet in the prior week, 49 billion cubic feet in the same week last year, while the five-year average change for the week is a decline of 140 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in February inched up 10 cents, or 0.28%, to trade at $35.91 a barrel, while heating oil for January delivery slipped 0.24% to trade at $1.097 per gallon.
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