The NYMEX January natural gas futures contract traded lower for a fourth straight day Tuesday as increasingly bearish weather forecasts continued to weigh on the market.
The contract settled at $3.263/MMBtu, down 12.9 cents. The January contract has now fallen in each of the previous four trading sessions, giving up a combined 30.4 cents, or 8.5%.
The fall in the prompt-month contract comes as the latest six- to 10-day and eight- to 14-day outlooks from the US National Weather Service, issued Tuesday afternoon, continued to call for above-average temperatures across the eastern half of the country.
"The natural gas market continues to collapse its premium over the $3.20/MMBtu five-year-average price for this time of year as the temperature forecast for the next two weeks trended warmer than a day ago," Citi Futures' Tim Evans said in an email Tuesday. "Warmer-than-normal temperatures from the Southwest and Texas to the Great Lakes and East Coast are seen limiting overall heating demand."
Last week, US working gas storage fell by 147 Bcf, nearly double the five-year average, according to Thursday's weekly gas storage report from the Energy Information Administration. Despite early expectations calling for another outsized withdrawal this week, bullish weekly storage numbers have been unable to provide support to prices.
Over the next seven days, total US gas demand is expected to average 93.6 Bcf/d, down from the sustained triple-digit levels reached in the previous week, data from Platts Analytics' Bentek Energy showed.
The January contract so far on Tuesday has traded in a range between $3.242/MMBtu and $3.408/MMBtu.
