Investing.com - Natural gas futures plunged for the third consecutive session on Wednesday, as forecasts for milder U.S. weather weighed ahead of the expiration of the front-month March contract.
On the New York Mercantile Exchange, natural gas futures for delivery in March fell to a session low of $4.485 per million British thermal units, the weakest since January 22.
Nymex March gas prices last traded at $4.543 per million British thermal units during U.S. morning hours, down 3.15%.
The March contract settled 1.54% higher on Tuesday to end at $4.691 per million British thermal units.
The March contract is due to expire at the end of Wednesday’s trading session. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Meanwhile, the more actively traded April contact lost 2.85% to trade at $4.557 per million British thermal units.
April natural gas futures were likely to find support at $4.434 per million British thermal units, the low from January 22 and resistance at $5.209, the high from February 24.
Prices of the commodity are down nearly 29% this week as updated weather-forecasting models called for a return of milder temperatures across the eastern U.S. as a blast of cold artic air moves out of the region.
The U.S. National Weather Service said that higher temperatures than previously forecast were expected in the Midwest from March 6 to March 10.
Meanwhile, investors looked ahead to key U.S. weekly supply data on Thursday to gauge the strength of demand. Total U.S. natural gas storage stood at 1.443 trillion cubic feet as of last week, the lowest for this time of year since 2004.
Prices rallied to a more than five-year high of $6.493 per million British thermal units earlier in the week as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in April added 0.35% to trade at $102.19 a barrel, while heating oil for April delivery inched up 0.15% to trade at $3.039 per gallon.