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Natural gas extends losses on forecasts for brief U.S. warming trend

Published 12/17/2013, 12:45 PM
Updated 12/17/2013, 12:46 PM

Investing.com - Natural gas prices carried Monday's losses into Tuesday as weather forecasts continued to point to a warming trend over the central and eastern U.S. next week, though losses were somewhat limited on longer-range forecasts calling for a return of below-normal temperatures.

On the New York Mercantile Exchange, natural gas futures for delivery in January traded at USD4.268 per million British thermal units during U.S. trading, down 0.27%.

The commodity hit a session low of USD4.196 and a high of USD4.295.

The January contract settled down 1.65% at USD4.279 per million British thermal units on Monday.

Futures were likely to find support at USD4.175  per million British thermal units, Wednesday's low, and resistance at USD4.317, Monday's high.

In its six-to-10-day outlook issued Sunday, the U.S. National Weather Service said it expected above-normal temperatures along the East coast from New York to Florida. The agency’s eight-to-14-day outlook showed above-normal temperatures in the western part of the country.

Milder temperatures diminish the need for heating this time of year, thus decreasing demand for natural gas at the nation's thermal power generators.

However, natgasweather.com called for below-normal temperatures to return to portions of the Midwest and Northeast by the end of December, with parts of the central U.S. possibly seeing cooler-than-normal mercury readings as well, which cushioned losses.

Meanwhile, U.S. supply levels remained in focus. Total U.S. natural gas storage stood at 3.533 trillion cubic feet as last week, more than 7% below last year's unusually high level and nearly 3% below the five-year average for this time of year.

Early withdrawal estimates for this week’s storage data range from 180 billion cubic feet to 229 billion cubic feet, compared to a drop of 70 billion cubic feet during the same week a year earlier.

The five-year average change for the week is a decline of 133 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were up 0.02% and trading at USD97.79 a barrel, while heating oil for January delivery were down 0.79% and trading at USD2.9667 per gallon.










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