INV: U.S. natural gas slides to 3-month lows amid lack of cold weather
Investing.com - U.S. natural gas futures fell sharply on Monday, hitting the lowest level since November as forecasts continued to call for mostly warmer-than-normal weather in key regions across the U.S. for the rest of the winter.
Natural gas for March delivery on the New York Mercantile Exchange sank to a session low of $2.745 per million British thermal units, a level not seen since November 18.
It was last at $2.766 by 8:20AM ET (13:20GMT), down 7.3 cents, or around 2.6%. The more actively-traded April contract slumped 6.9 cents, or 2.3%, to $2.882.
Trading activity was likely to stay light as markets in the U.S. remain closed for Presidentâ€™s Day on Monday.
Prices of the heating fuel sank 7% last week, taking its losses for the year to almost 24%, as forecasts for warm winter weather weighed on heating demand expectations.
Based on data from the National Oceanographic and Atmospheric Administration, this yearâ€™s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average.
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 86 and 97 billion cubic feet in the week ended February 17.
That compares with a withdrawal of 114 billion cubic feet in the preceding week, 117 billion a year earlier and a five-year average drop of 158 billion cubic feet.
Total natural gas in storage currently stands at 2.445 trillion cubic feet, according to the U.S. Energy Information Administration, 12.4% lower than levels at this time a year ago and 3.5% above the five-year average for this time of year.
Without significant demand for natural gas, inventories could stay near record levels and may even continue to pull prices even lower.