Investing.com - U.S. natural gas futures plunged on Tuesday, adding to losses from the prior session as warmer-than-normal weather in key gas-consuming regions in the U.S. dampened demand expectations for the heating fuel.
Natural gas for December delivery on the New York Mercantile Exchange fell by as much as 5% to a session low of $2.867 per million British thermal units.
It was last at $2.892 by 10:40AM ET (14:40GMT), down 13.4 cents, or 4.4%. A day earlier, they lost 7.9 cents, or 2.54%.
Updated weather forecasting models showed that high pressure weather systems will dominate over the central and southern U.S. this week, resulting in much warmer than normal conditions.
Overall, demand for natural gas will be much lighter than normal with the lack of subfreezing temperatures across the eastern U.S. and the Great Lakes-region.
Meanwhile, market participants awaited weekly supply data due on Thursday, which is expected to show a build in a range between 49 and 59 billion cubic feet in the week ended October 28.
That compares with a gain of 73 billion cubic feet in the preceding week, 56 billion a year earlier and a five-year average build of 63 billion cubic feet.
Total natural gas in storage currently stands at 3.909 trillion cubic feet, according to the U.S. Energy Information Administration, 1.3% higher than levels at this time a year ago and 4.7% above the five-year average for this time of year.
Natural gas futures have been under heavy selling pressure in recent days as warmer-than-average weather in key gas-consuming regions in the U.S. ignited speculation that a mild winter will curtail demand for the heating fuel and leave a glut of it in storage, weighing on prices next year.
Gas futures often reach a seasonal low in October, when mild weather reduces demand, before recovering in the winter, when heating-fuel use peaks.