Investing.com - Natural gas futures fell to the lowest level in more than three-months during U.S. morning trade on Thursday, as forecasts showing mild weather across most parts of the U.S. in the first two weeks of January weighed on sentiment.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on winter heating demand.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD3.171 per million British thermal units during U.S. morning trade, down 1.9% on the day.
It earlier fell by as much as 2.1% to trade at a session low of USD3.166 per million British thermal units, the weakest level since September 26.
Updated weather forecasts released Tuesday showed that warmer-than-normal weather was expected across key parts of the U.S. during the first two weeks of January, dampening sentiment on the heating fuel.
The U.S. National Weather Service's six-to-10 outlook released Wednesday again called for above-normal temperatures for a little more than the eastern half of the nation, with below-normal readings in the West.
Bearish speculators are betting on the mild weather reducing winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, market players looked ahead to a closely watched U.S. government report on natural gas supplies on Friday. The report comes out a day later than usual due to the Christmas holiday.
Early withdrawal estimates range from 100 billion cubic feet to 165 billion cubic feet. Inventories fell by 77 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 111 billion cubic feet.
Total U.S. natural gas stockpiles stood at 3.652 trillion cubic feet as of last week, 2.5% higher than last year at this time and 13% above the five-year average.
The EIA report will be released on Friday, one day later than usual due to the New Year holiday.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February shed 0.25% to trade at USD92.91 a barrel, while heating oil for February delivery fell 0.9% to trade at USD3.018 per gallon.
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