nvesting.com - Natural gas edged lower on Wednesday after updated weather-forecasting models continued to call for mild temperatures across much of the U.S., which should curb demand for heating.
On the New York Mercantile Exchange, natural gas futures for delivery in January were down 2.77% at $3.767 per million British thermal units during U.S. trading. The commodity hit a session low of $3.764, and a high of $3.869.
The January contract settled down 3.32% on Tuesday to end at $3.874 per million British thermal units.
Natural gas futures were likely to find support at $3.620 per million British thermal units, the low from Oct. 28, and resistance at $4.529, last Wednesday's high.
Forecasts for milder temperatures to stick around for the coming days once a cold snap pushes out pressured prices deeper into negative territory on Wednesday.
"Very cold air over the north-central U.S. will rapidly warm in the days ahead and will become above normal by late this week, leaving only small portions of the upper Great Lakes and New England with cold temperatures. The rest of the U.S. will become quite comfortable, especially over the southern half of the U.S., where highs in the 60s and 70s will be widespread," Natgasweather.com reported in its Wednesday midday update.
"The Northeast does have a weather system tracking through with areas of rain and snow, but only with slightly cooler than normal temperatures. There will be additional weather systems to follow next week that will tap into cooler Canadian temperatures, although it still looks like the more intimidating frigid Arctic air is unlikely to reach the northern U.S."
Bearish speculators are betting on the mild weather to dampen demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, the U.S. Energy Information Administration said last week that natural gas storage in the U.S. fell by 162 billion cubic feet in the week before, surpassing expectations for a decline of 150 billion.
The five-year average change for the week is a drop of 6 billion cubic feet.
Total U.S. natural gas storage stood at 3.432 trillion cubic feet as of last week, 9.2% below year-ago levels and nearly 10.4% below the five-year average for this time of year.
The Energy Information Administration's next storage report is slated for release on Thursday, Dec. 4, with analysts expecting a decline of 47 billion cubic feet for the week ending Nov. 28.
The five-year average change for the week is a decrease of 50 billion cubic feet. Stockpiles fell by 141 billion in the same week a year earlier.