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MTECHTIPS:-U.S. natural gas futures rally 4% after testing 1995 lows
U.S. natural gas futures bounced off the lowest level in almost 20 years on Monday, as a round of short-covering lifted prices, but gains were limited as U.S. weather forecasts signaled warmer weather in the weeks ahead. Natural gas for delivery in April on the New York Mercantile Exchange fell to an intraday low of $1.612 per million British thermal units before rallying sharply to trade at $1.733 by 15:30 GMT, or 10:30AM ET, up 6.7 cents, or 4.02%. Price action in the natural gas market mirrored that from Friday’s session, when futures hit $1.611, before ending the session in the green. A break below $1.610 would have taken prices to the lowest level since September 1995. Updated weather forecasting models continued to call for much warmer-than-normal weather through the middle of March, dampening late-winter heating demand. The above-average weather is expected to continue through most of the month. The heating season from November through March is the peak demand period for U.S. gas consumption. However, a warmer-than-normal winter due to the El Niño weather pattern has limited the amount of heating days and reduced demand for the fuel. Natural gas futures lost 4.5 cents, or 6.98%, last week, the fifth straight weekly decline, as a widening supply glut and expectations of sluggish demand weighed.
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