Our sharetipsexpert was consider, Natural gas prices plunged on Friday, hitting a fresh 28-month low for the fourth consecutive day as forecasts for warmer-than-normal winter weather in the U.S. and concerns over high inventory levels continued to dampen sentiment on the heating fuel.
On the New York Mercantile Exchange, natural gas futures for delivery in February settled at USD2.627 per million British thermal units by close of trade on Friday, plummeting 12.8% over the week, the biggest weekly drop since August 2009.
Earlier Friday, prices fell to USD2.622, the lowest since September 7, 2009.
Natural gas prices have tumbled nearly 27% since the beginning of December. So far in January, prices are approximately 40% lower than a year ago. The natural gas contract has not been this cheap at this time of year since 2002.
Gas futures typically climb during the winter months, as temperatures fall and demand for heating fueled by natural gas rises. But mild winter weather coupled with high inventory and production levels in the U.S. have kept prices depressed at 28-month lows in recent sessions.
Winter temperatures in the U.S. have yet to reach levels cold enough to boost demand for the heating fuel. In the Northeast, there have been only four warmer Decembers in the last 117 years, according to the U.S. National Weather Service.
Long-range weather forecasts continue to point to above-average temperatures across the U.S. through early February.
Natural gas futures have closely tracked weather forecasts in recent weeks. Above-normal winter temperatures decrease the need for gas-fired electricity to heat homes, reducing demand for natural gas.
Prices came under pressure on Thursday after the U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. fell by 95 billion cubic feet in the preceding week.
The drawdown was significantly lower than the 137 billion cubic feet withdrawn in the same week a year earlier. The five-year average change for the week is a decline of 128 billion cubic feet, according to U.S. Energy Department data.
Total U.S. natural gas storage stood at 3.377 trillion cubic feet as of last week, up 13.4% compared to the same week a year earlier and 17% above the five-year average for the week.
On Wednesday, natural gas prices tumbled nearly 6%, the biggest one-day drop in eight months as revised forecasts showed milder weather across much of the U.S. through late January, reducing demand for the heating fuel.
Elsewhere on the NYMEX, light sweet crude oil futures for February delivery traded at USD99.31 a barrel by close of trade on Friday, losing 2.15% on the week, while heating oil for February delivery retreated 1.32% over the week to settle at USD3.045 per gallon by close of trade Friday.