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U.S. natural gas sinks to 3-month lows on warm winter weather

Investing.com -

Investing.com - U.S. natural gas futures fell again on Tuesday, hitting the lowest level since November amid forecasts for warmer weather in key regions across the U.S. during the next few weeks.

Natural gas for March delivery on the New York Mercantile Exchange sank to a session low of $2.903 per million British thermal units, a level not seen since November 21.

It was last at $2.916 by 8:45AM ET (13:45GMT), down 2.9 cents, or around 1%, after losing 9.0 cents, or about 3%, a day earlier.

The natural-gas market is on the defensive after forecasting models showed cold air exiting the Northeast, with the updated 6-10 day forecast looking warmer than a day ago.

Prices of the heating fuel are down almost 23% since the start of the year as forecasts for warm winter weather weighed on heating demand expectations.

Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns.

About half of U.S. homes use natural gas for heating.

Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 122 and 133 billion cubic feet in the week ended February 10.

That compares with a withdrawal of 152 billion cubic feet in the preceding week, 163 billion a year earlier and a five-year average drop of 156 billion cubic feet.

Total natural gas in storage currently stands at 2.559 trillion cubic feet, according to the U.S. Energy Information Administration, 11.3% lower than levels at this time a year ago and 1.8% above the five-year average for this time of year.

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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.

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