Investing.com - U.S. natural gas futures sank to the lowest level since 1999 on Monday as forecasts calling for more warmth in the U.S. northeast over the next two weeks dragged down prices.
Natural gas for delivery in April on the New York Mercantile Exchange fell to an intraday low of $1.692 per million British thermal units, a level not seen in 17 years, before recovering slightly to trade at $1.702 by 13:40GMT, or 8:40AM ET, down 8.9 cents, or 4.97%.
U.S. weather models kept pointing to higher-than-normal temperatures during the first ten days of March, dampening late-winter heating demand.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Natural gas futures lost 7.6 cents, or 4.07%, last week, the fourth straight weekly decline, as a widening supply glut and expectations of mild demand weighed.
Natural gas storage in the U.S. fell by 117 billion cubic feet last week, according to the U.S. Energy Information Administration, much less than expectations for a decline of 139 billion.
That compared with draws of 158 billion cubic feet in the prior week, 220 billion cubic feet in the same week last year and a five-year average of around 137 billion.
Total U.S. natural gas storage stood at 2.584 trillion cubic feet, 23.8% higher than levels at this time a year ago and 22.4% above the five-year average for this time of year.
Some market experts worry there may be too much gas left in storage at the end of March when utilities traditionally start injecting the fuel back into storage for the next winter.
The EIA's next storage report is due on Thursday, March 3. Inventories fell by 198 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 138 billion cubic feet.
Natural gas futures are down nearly 28% so far this year as a warmer-than-normal winter due to the El Niño weather pattern has limited the amount of heating days and reduced demand for the fuel.
Elsewhere on the Nymex, crude oil for delivery in April ticked up 42 cents, or 1.28%, to trade at $33.20 a barrel, while heating oil for April delivery jumped 1.4% to trade at $1.081 per gallon.