The one factor that has the greatest impact on natural gas prices is the weather. If winter temperatures are colder than normal, demand increases and will most likely cause an increase in natural gas prices. Recent forecasts for milder weather in the coming weeks revived concerns about high storage levels of natural gas, sending the commodity lower.
Natural gas for January delivery slipped to settle at $3.346 a million British thermal units on the New York Mercantile Exchange, down 10.5 cents, or 3%.
NOAA’s long range forecast still incorporates El Niño effects on winter weather, predicting above normal temperatures in the north central and northeast US. If the NOAA weather predictions for a warmer than average winter are accurate, then heating demand will be low and natural gas prices might hover between $ 2.90 and $ 3.30 per MMBtu over the winter (the EIA’s Short Term Energy Outlook predicts $ 3.34…
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