Investing.com - U.S. natural gas prices declined for the fifth consecutive session on Tuesday to trade near the lowest level in 28 months, as forecasts for mid-February showed weather is expected to be warmer than previously predicted.
On the New York Mercantile Exchange, natural gas for delivery in March fell by as much as 6.6 cents, or 2.47%, to hit a session low of $2.651 per million British thermal units, before trading at $2.672 during U.S. morning hours, down 0.9 cents, or 0.32.
A day earlier, natural gas touched $2.608, a level not seen since August 2012, before ending at $2.680, down 1.1 cents, or 0.41%.
Futures were likely to find support at $2.608 per million British thermal units, the low from February 2, and resistance at $2.924, the high from January 29.
Updated weather forecast models called for frigid temperatures in the key Northeast and Midwest markets in the next three days.
However, extended weather forecasting models showed that below-normal temperatures may give way to higher readings by the middle of February, dampening demand expectations for the heating fuel.
Bearish speculators are betting on the near-normal weather reducing winter demand for the heating fuel.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, the U.S. Energy Information Administration's weekly storage report slated for release on Thursday is expected to show a decline of 123 billion cubic feet for the week ending January 30.
Inventories fell by a whopping 259 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 165 billion cubic feet. Natural gas storage in the U.S. fell by 94 billion cubic feet last week.
Total U.S. natural gas storage stood at 2.543 trillion cubic feet, 15% above year-ago levels, the widest surplus since August 2012.
Nymex natural gas prices lost 16.7 cents, or 9.03%, last week, capping the ninth weekly decline in the past ten weeks.
Prices of the heating fuel plunged 15.9 cents, or 7.08%, in January, as an unusually mild start to winter limited demand while production soared.
Elsewhere on the Nymex, crude oil for delivery in March jumped $1.57, or 3.17%, to trade at $51.14 a barrel, while heating oil for March delivery rallied 3.01% to trade at $1.810 per gallon.