Natural gas futures fall to 28-month low
Investing.com - U.S. natural gas prices declined for the fourth consecutive session on Monday to hit the lowest level in 28 months, as investors assessed the near-term demand outlook amid ample supplies.
On the New York Mercantile Exchange, for delivery in March fell by as much as 6.6 cents, or 2.47%, to hit $2.625 per million British thermal units, a level not seen since August 2012, before trading at $2.627 during U.S. morning hours, down 6.5 cents, or 2.4%.
Futures were likely to find support at $2.610 per million British thermal units, the low from August 29, 2012, and resistance at $2.924, the high from January 29.
On Friday, natural gas lost 2.8 cents, or 1.03%, to settle at $2.691. Nymex natural gas prices lost 16.7 cents, or 9.03%, last week, capping the ninth weekly decline in the past ten weeks.
Prices of the heating fuel plunged 15.9 cents, or 7.08%, in January, as an unusually mild start to winter limited demand while production soared.
The National Weather Service issued storm warnings for most parts of the U.S. Midwest and Northeast on Monday, as households braced for the second major snowstorm in a week.
However, extended weather forecasting models showed that below-normal temperatures may give way to higher readings by the middle of February, dampening demand expectations for the heating fuel.
Bearish speculators are betting on the near-normal 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.
Natural gas storage in the U.S. fell by 94 billion cubic feet last week, compared to expectations for a decline of 113 billion and slowing from a drop of 216 billion in the previous week.
Inventories fell by 219 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 168 billion cubic feet.
Total U.S. natural gas storage stood at 2.543 trillion cubic feet, 15% above year-ago levels, the widest surplus since August 2012.
Natural gas prices have been extremely volatile in recent sessions as investors react to daily changes in weather patterns. Futures have either gained or declined more than 1% in each of the past 11 trading days.
Elsewhere on the Nymex, for delivery in March tacked on 86 cents, or 1.78%, to trade at $49.10 a barrel, while for March delivery rallied 2.03% to trade at $1.734 per gallon.
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