Investing.com – U.S. natural gas futures crashed to two-month
lows on Friday, as forecasts calling for less cold in the U.S.
northeast over the next two weeks weighed.
On the New York Mercantile Exchange, natural gas for delivery in
March hit an intraday low of $1.794 per million British thermal
units, a level not seen since December 21, before recovering
slightly to close at $1.804, down 4.8 cents, or 2.59%.
Meanwhile, the more actively-traded April contract slumped 6.0
cents, or 3.11%, to finish at $1.867 by close of trade.
For the week, natural gas futures lost 14.8 cents, or 8.24%, the
third straight weekly decline, on expectations of continued mild
Updated weather forecasting models continued to point to
higher-than-normal temperatures later in February and in early
March, dampening late-winter heating demand expectations.
The heating season from November through March is the peak
demand period for U.S. gas consumption.
Natural gas prices tumbled nearly 5% on Thursday after weekly
storage data pointed to a widening supply glut. The U.S. Energy
Information Administration said that natural gas storage in the
U.S. fell by 158 billion cubic feet, compared to expectations for a
decline of 154 billion.
That compared with draws of 70 billion cubic feet in the prior
week, 110 billion cubic feet in the same week last year and a
five-year average of around 176 billion.
Total U.S. natural gas storage stood at 2.706 trillion cubic
feet, 19.7% higher than levels at this time a year ago and 20.5%
above the five-year average for this time of year.
Some market experts worry there may be too much gas left in
storage at the end of March when utilities traditionally start
injecting the fuel back into storage for the next winter.
The EIA's next storage report is due on Thursday, February 25.
Inventories fell by 220 billion cubic feet in the same week last
year, while the five-year average change for the week is a drawdown
of 137 billion cubic feet.
Natural gas futures are down nearly 23% so far this year as a
warmer-than-normal winter due to the El Niño weather pattern has
limited the amount of heating days and reduced demand for the
Elsewhere on the Nymex, crude oil for March delivery settled at
$29.64 a barrel by close of trade on Friday, up 20 cents, or 0.67%,
on the week, while heating oil for March delivery slumped 4.1% on
the week to settle at $1.025 per gallon.
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