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MTECHTIPS:-Natural gas drops as mild weather settles over the U.S.

MTECHTIPS:-Natural gas drops as mild weather settles over the U.S.

Natural gas futures dropped on Monday after updated weather-forecasting models called for mild temperatures to push out colder air and settle in over the U.S. in the coming days, which should curb demand for heating. On the New York Mercantile Exchange, natural gas futures for delivery in January were down 3.12% at $3.957 per million British thermal units during U.S. trading. The commodity hit a session low of $3.929, and a high of $4.035. The January contract settled down 6.22% on Friday to end at $4.084 per million British thermal units. Natural gas futures were likely to find support at $3.620 per million British thermal units, the low from Oct. 28, and resistance at $4.529, Wednesday’s high. Forecasts for milder temperatures to make their way across the U.S. this month pressured prices lower, as colder air will drift northward and give the lower 48 states a chance to thaw from a recent cold snap.”The southern and eastern U.S. remains quite warm with highs today again reaching the 60s and 70s, significantly easing heating demand over high population regions compared to recent patterns. As the week progresses, temperatures will become quite warm over the southern U.S., and seasonably cool over the far northern U.S.,” Natgasweather.com reported in its Monday midday update. “This will result in only moderate heating demand as there simply won’t be enough of the U.S. covered by sub-freezing temperatures to be considered significant.” Bearish speculators are betting on the mild weather to dampen demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption. Investors also digested last week’s supply report. Meanwhile, the U.S. Energy Information Administration said in its weekly report last Wednesday that natural gas storage in the U.S. fell by 162 billion cubic feet in the week before, surpassing expectations for a decline of 150 billion.

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