Natural gas prices slide to 8-week low on warm weather forecasts

Investing.com – U.S. natural gas futures sank to an eight-week low on Monday, as updated weather forecasting models called for higher-than-normal temperatures later in February.

Bearish speculators are betting on the mild weather reducing late-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.

for delivery in March on the New York Mercantile Exchange fell to an intraday low of $1.916 per million British thermal units, a level not seen since December 21, before paring losses to trade at $1.920 by 15:25 GMT, or 10:25AM ET, down 4.6 cents, or 2.34%.

Natural gas futures lost 14.0 cents, or 4.7%, last week, the second straight weekly decline, as mild winter weather and a widening supply glut weighed.

in the U.S. fell by 70 billion cubic feet last week, according to the U.S. Energy Information Administration, below expectations for a decline of 82 billion.

That compared with draws of 152 billion cubic feet in the prior week, 160 billion cubic feet in the same week last year and a five-year average of around 162 billion.

Total U.S. natural gas storage stood at 2.864 trillion cubic feet, 20.0% higher than levels at this time a year ago and 19.0% above the five-year average for this time of year.

The EIA’s next storage report is due on Thursday, February 18. Inventories fell by 110 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 176 billion cubic feet.

Natural gas futures are down nearly 18% 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, for delivery in March tacked on 30 cents, or 1.02%, to trade at $29.74 a barrel, while for March delivery inched up 0.12% to trade at $1.070 per gallon.

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