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MTECHTIPS:-Natural gas futures plunge 3% on warm December forecasts

MTECHTIPS:-Natural gas futures plunge 3% on warm December forecasts

U.S. natural gas prices extended sharp losses from the previous session on Monday, as updated weather forecasting models for the first two weeks of December pointed to a return to mild weather, prompting investors to bet that utilities and homes will burn less natural gas as demand for heating falls. On the New York Mercantile Exchange, natural gas for delivery in January fell by as much as 2.95% to touch a daily low of $3.950 per million British thermal units, the weakest level since November 14, before recovering to last trade at $3.992, down 9.4 cents, or 2.3%. Futures were likely to find support at $3.931 per million British thermal units, the low from November 14, and resistance at $4.367, the high from November 28. Nymex gas futures lost 27.1 cents, or 6.22%, on Friday to settle at $4.084 per million British thermal units as forecasts for milder temperatures to settle in across much of the U.S. in early December weighed. 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. Meanwhile, the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. fell by 162 billion cubic feet last week, compared to expectations for a decline of 150 billion. The five-year average change for the week is a drop of 6 billion cubic feet. Total U.S. natural gas storage stood at 3.432 trillion cubic feet as of last week, 9.2% below year-ago levels and nearly 10.4% below the five-year average for this time of year.

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