After the opening bell on Wednesday, U.S. natural gas futures dropped for the second day in a row, declining near one week low, as weather predictions for the end of January turned warmer, which should reduce demand for the heating fuel.
In recent weeks, natural gas markets have been volatile, adjusting course quickly in reaction to changing outlooks in near term weather patterns.
After increasing almost 2.7% to a session high of $3.513 per million British thermal units, a level not seen since January 3, Delivery of Natural gas for February on the NYMEX declined about 3% to a session low of $3.310 per million British thermal units, a level not perceived since January 12.
It was previously at $3.320 by 9:00AM ET (14:00GMT), down 9.2 cents, or about 2.7%, after plunging 0.7 cents, or 0.2%, the day earlier.
In the meantime, market players looked forward to weekly storage data scheduled on Thursday, which is expected to indicate a draw in a range between 220 and 230 billion cubic feet in the week ended January 13.
Which compares with a withdrawal of 151 billion cubic feet in the preceding week, 178 billion a year before and a five year average decline of 170 billion cubic feet.
Currently, total natural gas in storage stands at 3.160 trillion cubic feet, according to the U.S. Energy Information Administration (EIA), 10.3% lower than levels at this time a year ago and approximately 0.1% below the five-year average for this time of year.
On Additional News
Crude oil prices inched higher in Asian trade on inspiring statistics, which indicated oil production by the OPEC was dropping, pushing the market closer towards a rebalance. However, any increase could be balanced by the possible expansion in U.S. shale oil output.
On the NYMEX, light, delivery of sweet crude futures in February CLG7, +1.31% traded at $51.52 a barrel, up $0.44, or 0.9%, in the Globex electronic session.
March Brent crude LCOH7, +1.52% on London’s ICE Futures exchange rose $0.49, or 0.9%, to $54.41 a barrel.
According to OPEC’s recent data, the production by the 13-member bloc contracted by 221,000 barrels a day in December from the prior month. Generally, the cartel produced nearly 33.1 million barrels a day in December.
The group still needs to reduce to approximately 31.8 million barrels a day in order to meet the level it promised in its output cut agreement signed the previous year.
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