Investing.com - Natural gas futures fell sharply on Tuesday, extending heavy losses from the previous session as forecasts for milder U.S. weather weighed ahead of the expiration of the front-month contract.
Natural gas futures tumble again ahead of March contract expiration
On the New York Mercantile Exchange, natural gas futures for delivery in March fell to a session low of $5.000 per million British thermal units. Nymex March gas prices last traded at $5.093 per million British thermal units during U.S. morning hours, down 6.45%.
The March contract rallied to $6.493 per million British thermal units on Monday, the most since December 2008, before plummeting 11.25% to settle at $5.445.
The March contract is due to expire at the end of Wednesday’s trading session. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Meanwhile, the more actively traded April contact shed 0.45% to trade at $4.600 per million British thermal units.
Natural gas futures were likely to find support at $4.564 per million British thermal units, the low from February 10 and resistance at $6.493, the high from February 24.
Natural gas prices tumbled after updated weather-forecasting models called for a return of milder temperatures across the eastern U.S. as a blast of cold artic air moves out of the region.
The U.S. National Weather Service said Monday that higher temperatures than previously forecast were expected in the Midwest from March 6 to March 10.
Nymex natural gas prices rallied 15% last week, the second consecutive weekly gain, as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.
Total U.S. natural gas storage stood at 1.443 trillion cubic feet as of last week, the lowest for this time of year since 2004.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in April fell 1.1% to trade at $101.67 a barrel, while heating oil for April delivery shed 0.25% to trade at $3.042 per gallon
Natural gas futures tumble again ahead of March contract expirationThe March contract rallied to $6.493 per million British thermal units on Monday, the most since December 2008, before plummeting 11.25% to settle at $5.445.
The March contract is due to expire at the end of Wednesday’s trading session. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Meanwhile, the more actively traded April contact shed 0.45% to trade at $4.600 per million British thermal units.
Natural gas futures were likely to find support at $4.564 per million British thermal units, the low from February 10 and resistance at $6.493, the high from February 24.
Natural gas prices tumbled after updated weather-forecasting models called for a return of milder temperatures across the eastern U.S. as a blast of cold artic air moves out of the region.
The U.S. National Weather Service said Monday that higher temperatures than previously forecast were expected in the Midwest from March 6 to March 10.
Nymex natural gas prices rallied 15% last week, the second consecutive weekly gain, as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.
Total U.S. natural gas storage stood at 1.443 trillion cubic feet as of last week, the lowest for this time of year since 2004.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in April fell 1.1% to trade at $101.67 a barrel, while heating oil for April delivery shed 0.25% to trade at $3.042 per gallon
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