Frigid weather is disappearing from U.S. weather forecasts, sending natural gas futures lower for a third day.
A midday update to the government’s Global Forecast System computer model showed mostly average or above-normal temperatures in the central U.S. next week, a revision from earlier outlooks showing widespread cold.
Gas bulls need a deep freeze to boost prices, which tumbled to a 16-year low in December amid unprecedented seasonal warmth. Stockpiles are at the highest level on record for this time of year as shale supplies flood the market.
“Until we get some extreme weather, we’re going to be trading in a range near $2.20 and $2.30,” said Bob Yawger, director of futures division at Mizuho Securities USA Inc. “The market still remembers last year’s cold, so traders are reluctant to drive prices much lower until we have more clarity on the forecasts.”
Natural gas for February delivery fell 5.8 cents, or 2.5 percent, to settle at $2.267 per million British thermal units on the New York Mercantile Exchange. Prices dropped 19 percent in 2015.