U.S. natural gas fell by 7% on fresh forecasts for warm weather

On Tuesday, the February gas contract fell on the New York Mercantile Exchange. The trading ended at $3.639 per metric million British thermal units, thus a decline by 7%, or 27 cents, was registered.

As it was said in a note issued by Houston-based energy markets consultancy Gelber & Associates, bears are affecting the market again by selling gas futures. The company also noted that the prices are once again controlled by the sellers, and this fact has led to their falling as market participants consider ten more days of atypically high temperatures in the U.S.

Weather forecasts signal a possibility that the downward movement of prices might continue because of expected warm temperatures in the country that may last until mid-January.

At the same time, experts wrote that it’s also probable that gas futures might return to the level of $5 and higher, but it requires significant cooling in the U.S. for several weeks. The Gelber note also suggested that an opposite situation is also likely — in case weather forecast models show longer periods of warmth, gas prices might test new lows.