Natural gas futures under pressure as warmer weather weighs

Investing.com - U.S. natural gas prices fell for the third consecutive session on Tuesday, as updated weather forecasting models predicted a return to warmer weather by the end of the month.

Bearish speculators are betting on the mild weather to dampen demand for the heating fuel.

On the New York Mercantile Exchange, natural gas for delivery in January fell 1.15%, or 5.0 cents, to trade at $4.255 per million British thermal units during U.S. morning hours.

A day earlier, Nymex gas futures fell to $4.155, the weakest level since November 16, before settling at $4.304, down 11.3 cents, or 2.56%, as weather forecasting models pointed to less frigid temperatures across the U.S. later this month.

Futures were likely to find support at $4.155 per million British thermal units, the low from November 24, and resistance at $4.689, the high from November 21.

Natural gas came under pressure as milder temperatures were expected to spread across most parts of the U.S., after a blast of cold air swept through much of the country last week, prompting investors to bet that utilities and homes will burn less natural gas as demand for heating falls.

Meanwhile, investors continued to digest last week's inventory data, which showed the first storage draw of the heating season.

Natural gas storage in the U.S. fell by 17 billion cubic feet last week, compared to expectations for a decline of 12 billion.

Inventories fell by 36 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 10 billion cubic feet.

Total U.S. natural gas storage stood at 3.594 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 6.4% from a record 54.7% at the end of March.

The U.S. Energy Information Administration's next storage report slated for release on Wednesday is expected to show a significant decline of 130 billion cubic feet for the week ending November 21.

Elsewhere on the Nymex, crude oil for delivery in January rose 60 cents, or 0.79%, to trade at $76.38 a barrel, while heating oil for January delivery tacked on 0.92% to trade at $2.388 per gallon.