Investing.com - U.S. natural gas futures slid to a three-week low on Friday, as 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.
On the New York Mercantile Exchange, natural gas for delivery in February plunged 3.9 cents, or 1.82%, to close the week at $2.100 per million British thermal units. It earlier fell to $2.086, the lowest since December 24.
For the week, natural gas futures tumbled 34.6 cents, or 15.05%, the biggest weekly loss since February 2014, as forecasts showed above-normal temperatures for the eastern U.S. in late January.
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.
On Thursday, natural gas prices sank 13.0 cents, or 5.73%, after a government report showed a smaller-than-expected withdrawal last week, fueling fears over the high-levels of gas storage.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. fell by 168 billion cubic feet, below expectations for a decline of 178 billion.
That compared with a drawdown of 113 billion cubic feet in the prior week, while the five-year average change for the week is a withdrawal of 178 billion cubic feet.
Total U.S. natural gas storage stood at 3.475 trillion cubic feet, 16.9% higher than levels at this time a year ago and 13.7% above the five-year average for this time of year.
The EIA's next storage report slated for release on Thursday, January 21 is expected to show a withdrawal of approximately 150 billion cubic feet for the week ending January 15.
That compared with a decline of 217 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 160 billion cubic feet.
Elsewhere on the Nymex, crude oil for February delivery settled at $29.42 a barrel by close of trade on Friday, down $3.52, or 11.28%, on the week, while heating oil for February delivery slumped 11.2% on the week to settle at $0.9343 per gallon.