Natural gas prices are also disappointed to take account of expectations for colder conditions, especially in Europe.
The energy commodity has been trending in change territory since exceeding $3 last month, with many investors leaving hopes of a colder-than-normal winter.
January natural gas futures dropped $0.191, or 6.87%, to $2.589 per million British thermal units (BTU) at 17:03 GMT on Wednesday. Natural gas is poised for a weekly decline of almost 4%, reducing its year-to-date rally to under 19%.
As stated by the US Energy Information Administration (EIA), domestic inventories of natural gas contracted by 152 billion cubic feet for the week finishing December 18. This is near the median estimation of 155 billion cubic feet. This also represented the fifth continuous weekly reduction in US storage facilities.
NatGasWeather expects a more moderate winter forecast in the US
In sum, US stockpiles attain at 3.574 trillion cubic feet, up 278 billion cubic feet from the equivalent time a year ago
They are also 218 billion cubic feet over the five-year percentage of 3.356 trillion cubic feet.
On the weather front, NatGasWeather expects a more moderate winter forecast in the US. However, it does expect a long stretch of freezing temperatures from the close of December to the start of January in Europe. The US’s northeast region was crashed with a blast of winter, surviving heavy snow and frosty temperatures, which raised demand. The National Weather Service thinks that circumstances could trend colder in many US parts following the holiday season.
Market analysts dispute that weather-related demand will be crucial in limiting the increase in supplies. Early estimations intimate production will rise through the end of the first quarter of next year, before turning down sometime in the second quarter.
In other energy commodities, January West Texas Intermediate (WTI) crude oil futures raised $1.17, or 2.49%, to $48.19 per barrel. March Brent crude futures pinned on $1.18, or 2.35%, to $51.34 a barrel. January gasoline futures rose $0.0426, or 3.18%, to $1.3821 per gallon. January heating oil futures totaled $0.0375, or 2.56%, to $1.5005 a gallon.