Investing.com - U.S. natural gas prices snapped a four-day win streak on Wednesday, falling by as much as 6%, as forecasts that a cold snap in the U.S. would be short-lived weighed.
Natural gas for delivery in February on the New York Mercantile Exchange tanked 12.4 cents, or 5.25%, to trade at $2.246 per million British thermal units during U.S. morning hours.
It earlier fell by as much as 14.2 cents, or 5.99%, as updated weather forecasting models predicted that chilly winter conditions across the U.S. Midwest and Northeast are not expected to last for more than a week.
Trading volumes are expected to remain light in the final few days of the year, reducing liquidity in the market which could result in exaggerated moves.
On Tuesday, natural gas soared 11.4 cents, or 5.05%, amid winter storms and forecasts for colder U.S. weather. Prices of the fuel are up nearly 25% since falling to a 17-year low of $1.684 on December 18, as forecasts called for a return to cool weather, following a warm spell.
Natural gas typically rises ahead of the winter as colder weather sparks heating demand, yet an unusually mild start to winter due to the El Niño weather phenomenon has limited the amount of heating days.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Despite recent gains, prices of the fuel are still down nearly 20% so far this year, as weak demand and healthy stockpiles weighed.
The U.S. Energy Information Administration's next storage report slated for release on Thursday is expected to show a withdrawal of approximately 45 billion cubic feet for the week ending December 25.
That compares with a drawdown of 32 billion cubic feet in the prior week, 26 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 98 billion cubic feet.
Total U.S. natural gas in storage stood at 3.814 trillion cubic feet, 14.7% higher than levels at this time a year ago and 10.8% above the five-year average for this time of year.
Elsewhere on the Nymex, crude oil for delivery in February slumped 99 cents, or 2.63%, to trade at $36.88 a barrel, while heating oil for February delivery dropped 1.65% to trade at $1.139 per gallon.