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Natural Gas extends losses on forecasts for above normal temperatures

Published 04/03/2013, 01:38 PM
Updated 04/03/2013, 01:38 PM
Investing.com - Natural gas futures edged lower in afternoon trading on Wednesday, extending Tuesday's losses after weather forecasting models predicted warmer temperatures settling in for a good portion of the country in the coming days.

On the New York Mercantile Exchange, natural gas futures for delivery in May traded at USD3.933 per million British thermal units, down 0.92%.

The commodity hit a session low of USD3.926 and a high of USD3.985.

Weather forecasts issued earlier pointed to milder temperatures arriving in the key Northeast and Midwest markets over the next six to 10 days.

Warmer temperatures in the U.S. spring season push natural gas prices down, as the need for heating diminishes.

As late spring and early summer approach, however, rising temperatures hike demand for natural gas as more and more homes and businesses crank up their air-conditioning units to keep cool.

The National Oceanic and Atmospheric Administration said in its one-month temperature forecast released on Sunday that above-normal temperatures will settle in over large swaths of the U.S. this month.

Natural gas traders looked ahead to a closely-watched U.S. government report on natural gas supplies due out Thursday in an attempt to gauge the strength of late-winter heating demand.
 
Early withdrawal estimates range from 45 billion cubic feet to 97 billion cubic feet. Inventories increased by 43 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 4 billion cubic feet.

Total U.S. natural gas storage stood at 1.781 trillion cubic feet as of last week, 18.5% only 3.5% above the five-year average.

U.S. Elsewhere on the NYMEX, light sweet crude oil futures for delivery in May were down 2.29% and trading at USD94.96 a barrel, mainly due to increasing inventories in the U.S., while heating oil futures for May delivery were down 2.10% at USD3.0227 per gallon.








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