Natural gas falls as weather forecasts point to mild U.S. temperatures Natural gas dips as mild U.S temperatures seen cutting demand for heating, air conditioning
On the New York Mercantile Exchange, natural gas futures for delivery in December were down 1.33% at $3.649 per million British thermal units during U.S. trading. The commodity hit a session low of $3.623, and a high of $3.720.
The December contract settled down 0.22% on Friday to end at $3.698 per million British thermal units.
Natural gas futures were likely to find support at $3.545 per million British thermal units, the low from Nov. 19, 2013, and resistance at $3.842, last Monday’s high.
Updated weather-forecasting models released Friday called for mild temperatures across much of the U.S. into early November, which should prompt thermal power plants to burn less of the commodity in lieu of waning demand.
Bearish speculators are betting on the mild weather reducing early-winter demand for the heating fuel. The heating season from November through March sees peak demand period for U.S. gas consumption.
Meanwhile, investors continued to digest Thursday’s weekly inventory data, which showed that natural gas storage in the U.S. rose by 94 billion cubic feet last week.
The five-year average change for the week is an increase of 70 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 27 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 3.393 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 9.1% from a record 54.7% at the end of March.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were down 0.48% at $80.62 a barrel, while heating oil for December delivery were down 0.12% at $2.4646 per gallon.