U.S. natural gas falls as demand forecasts decline at steady production levels

Natural gas futures in the U.S. fell on Wednesday. This is due to forecasts of warmer than previously expected weather, which has led to lower expectations for heating demand. At the same time, high production levels put additional pressure on the market.

The front-month futures for gas with delivery in January was down 30.5 cents, which is 4.2%, and has settled around $6.930 for one million British thermal units.

Thomas Saal, senior vice president of energy at StoneX Financial Inc, said the forecasts appear to be somewhat hesitant about a possible cold snap.

According to analysts at energy consulting firm Gelber & Associates, near-term weather forecasts show that expected temperatures are not so low that there are fears of increased supply shortages.

Experts at energy consulting firm Ritterbusch and Associates said in a note that the rate of production continues to rise, providing a limit to rising prices.