INV: Natural gas futures bounce off 13-month low on bargain buying
Investing.com - U.S. natural gas prices rebounded from the previous session's 13-month low on Tuesday, as investors returned to the market to seek bargains and to close out bets on lower prices.
On the New York Mercantile Exchange, natural gas for delivery in January tacked on 2.8 cents, or 0.78%, to trade at $3.623 per million British thermal units during U.S. morning hours.
A day earlier, Nymex gas futures hit $3.585, a level not seen since November 20, 2013, before settling at $3.595, down 20.7 cents, or 5.44%, as forecasts for milder temperatures to settle in across much of the U.S. during December weighed.
Futures were likely to find support at $3.549 per million British thermal units, the low from November 20, 2013, and resistance at $3.785, the high from December 8.
Natural gas prices have been on the decline in recent weeks. Prices are down almost 23% from a recent peak of $4.689 reached on November 21, as revised weather forecasts called for above-normal temperatures in the coming weeks.
Bearish speculators are betting on the mild weather to dampen demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, the U.S. Energy Information Administration said that natural gas storage in the U.S. fell by 22 billion cubic feet last week, less than expectations for a decline of 41 billion.
The five-year average change for the week is a decline of 50 billion cubic feet. Stockpiles fell by 141 billion in the same week a year earlier.
Total U.S. natural gas storage stood at 3.410 trillion cubic feet as of last week, 6.2% below year-ago levels and 9.8% below the five-year average for this time of year.
The EIA's next storage report is slated for release on Thursday, December 11, with analysts expecting a decline of 55 billion cubic feet for the week ending December 5.
Inventories fell by 92 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 72 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in January fell 47 cents, or 0.75%, to trade at $62.58 a barrel, while heating oil for January delivery slumped 0.13% to trade at $2.052 per gallon.
