Investing.com - U.S. natural gas prices fell sharply for the second straight day on Tuesday, as forecasts for warmer than normal weather across the west coast of the U.S. in the week ahead dampened demand expectations for the fuel.
Natural gas for delivery in February on the New York Mercantile Exchange sank 11.4 cents, or 4.78%, to trade at $2.282 per million British thermal units by 15:30 GMT, or 10:30AM ET.
A day earlier, natural gas plunged 7.6 cents, or 3.07%, after updated weather forecasting models for the end of January turned milder. Forecasts originally pointed to freezing temperatures in the U.S. east coast until the end of the month.
Bearish speculators are betting on the warm weather reducing winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Total U.S. natural gas storage stood at 3.643 trillion cubic feet as of last week, 14.7% higher than levels at this time a year ago and 12.7% above the five-year average for this time of year.
The U.S. Energy Information Administration's next storage report slated for release on Thursday is expected to show a withdrawal of approximately 170 billion cubic feet for the week ending January 8.
That compares with a drawdown of 113 billion cubic feet in the prior week, while the five-year average is a decline of 178 billion.
Elsewhere on the Nymex, crude oil for delivery in February dipped 24 cents, or 0.76%, to trade at $31.17 a barrel, while heating oil for February delivery lost 0.73% to trade at $1.007 per gallon.