The NYMEX January natural gas futures contract settled 3.3 cents lower at $3.314/MMBtu Friday, extending declines to a seventh straight session on updated forecasts for well-above-average temperatures over the next two weeks.
The gas contract has dropped by 38.6 cents over last seven sessions. The US National Weather Service is showing well-above-average temperatures all across the Midwest and some parts of the eastern US in its six- to 10-day and eight- to 14-day outlooks.
"If the temperature forecasts that came out today end up coming to fruition, then the lack of heating demand could allow the contract to hang around this level," said Gelber & Associates analyst Aaron Calder.
According to analysts, the contract remains slightly oversold in terms of technical indicators, with a possible corrective bounce.
Yet, "if the forecasts for demand do not improve real soon, it is going to get ugly, and sub-$3.00[/MMBtu] gas in January is likely," said Kilduff Report analyst Mike Fitzpatrick. The contract traded Friday between $3.261/MMBtu and $3.363/MMBtu.
