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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 fell sharply on Monday, as forecasts for milder temperatures to settle in across much of the U.S. during December weighed. On the New York Mercantile Exchange, natural gas for delivery in January fell by as much as 3.97% to touch a daily low of $3.651 per million British thermal units, before trading at $3.678 during U.S. morning hours, down 12.4 cents, or 3.27. Nymex gas futures rallied 15.3 cents, or 4.19%, on Friday to settle at $3.802 per million British thermal units as a bout of technical buying lifted prices. Futures were likely to find support at $3.638 per million British thermal units, the low from December 4, and resistance at $3.824, the high from December 5. Updated weather forecasting models predicted above-average temperatures across most parts of the U.S. over the next two weeks. 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 that natural gas storage in the U.S. fell by 22 billion cubic feet last week, less than expectations for a decline of 41 billion. The five-year average change for the week is a decline of 50 billion cubic feet. Stockpiles fell by 141 billion in the same week a year earlier. Total U.S. natural gas storage stood at 3.410 trillion cubic feet as of last week, 6.2% below year-ago levels and 9.8% below the five-year average for this time of year. The EIA’s next storage report is slated for release on Thursday, December 11, with analysts expecting a decline of 55 billion cubic feet for the week ending December 5. Inventories fell by 92 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 72 billion cubic feet.

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