Investing.com - U.S. natural gas futures fell back towards the prior session’s six-week low on Wednesday, as market participants looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.
The U.S. Energy Information Administration's storage report slated for release on Thursday is expected to show a withdrawal of approximately 170 billion cubic feet for the week ending January 29.
That compares with draws of 211 billion cubic feet in the prior week, 115 billion cubic feet in the same week last year and a five-year average of 178 billion.
Total U.S. natural gas storage stood at 3.086 trillion cubic feet, 17.2% higher than levels at this time a year ago and 14.0% above the five-year average for this time of year.
Natural gas for delivery in March on the New York Mercantile Exchange fell to an intraday low of $1.994 per million British thermal units, before bouncing back to $2.022 by 13:45 GMT, or 8:45AM ET, down 0.2 cents, or 0.12%.
A day earlier, futures closed down 12.7 cents, or 5.9%, at $2.025, after tumbling to $1.976, a level not seen since December 23.
Natural gas is down 12% so far this week as milder weather forecast for the last eight weeks of the U.S. November-March winter heating season dampened demand hopes.
Bearish speculators are betting on the mild winter weather to reduce demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Prices sank to $1.684 in mid-December, a level not seen in almost 17 years, as an unusually mild start to winter due to the El Niño weather phenomenon limited the amount of heating days.
Elsewhere on the Nymex, crude oil for delivery in March tacked on 57 cents, or 1.89%, to trade at $30.45 a barrel, while heating oil for March delivery jumped 2.97% to trade at $1.040 per gallon.