U.S. natural gas futuresAs warmer-than-expected winter predictions sent prices plunging, Tuesday’s slide was the smallest in over two months.

For January delivery, the contract fell as much as 7 percent to trade at $4.51 for a million British thermal unit (MMBtu) This is in addition to Monday’s 11.37% drop that saw the contract trade at $4.85/MMBtu.

Futures have fallen more than 17% in the past two sessions.

David Givens from Argus Media, North America head for gas and power services, stated that the weather outlook for core heating demand month of winter (December January, February, February) indicates higher temperatures than usual in major US demand centres.

“[Monday was]Jan 1st is prompt month. Commercial (producers, distributors of gas) as well as non-commercial participants in the market (speculators hedge funds, prop shop) look at fundamentals. [which is]He said, “We are pushing the prices down.”

After natural gas futures rose 7% on Friday despite oil dropping 13% in the same session, the selling has been taking place over the past two days. Some of Friday’s selling could have been due to traders closing down positions.

Now, natural gas is down around 16% per month. It’s now on pace for its worst month since December 2018. It is now on the verge of a second month with declines.

The volatile nature of natural gas trades this year has led to sharp declines in prices. This follows an era of great strength. From April to September, the contract saw a 34% increase in prices.

This strength was maintained into October with the contract reaching $6.466 per million BTU, its highest point since February 2014. This optimism is due in part to calls for power producers switching from oil to natural gasoline as high crude prices soared. U.S. energy prices were also higher due to an energy shortage in Europe and the U.K.

John Kilduff of Again Capital said that the volatility in natural gas markets has been high for several months. Kilduff noted that supply looked limited over the summer, and there was concern about undersupply going into the winter months. Stocks were able to be replenished thanks to mild fall temperatures.

“Storage levels have now matched the 5-year average. He said that the relative heat last week and this week as well as forecasts for mid-December had “just wrecked” the bull case.

Natural gas was up around 80% for the year. The year is also expected to be its strongest since 2005.