US natural gas futures on Monday fell 5 percent to a near seven-week low, pressured by forecasts for less cold weather and light heating demand. Front-month gas futures for February delivery on the New York Mercantile Exchange fell 18.2 cents, or 5.5 percent, to settle at $3.103 per million British thermal units, its lowest close since November 25.
"The market has begun the new week under renewed pressure as weekend updates to 1-2 week temperature views still favour warmer-than-normal trends," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note. Gas prices fell nearly 12 percent last week, the biggest weekly decline since January 2016, due to moderating weather forecasts. The latest forecasts called for the weather to shift from colder-than-normal levels over the past week to warmer-than-normal for the rest of January. Analysts forecast that utilities pulled 151 billion cubic feet of gas from storage during the warmer-than-normal week ended January 6, the smallest draw for that week since 2012. That compares with declines of 49 bcf in the prior week, 152 bcf a year earlier and a five-year average draw of 168 bcf for the week.