Natural gas futures and related exchange traded funds plunged Friday as weather forecasts hinted at milder temperatures in late December.

The United States Natural Gas Fund (NYSEArca: UNG) declined 6.9% Friday as Nymex natural gas futures dropped 6.3%, breaking below its $4 level to $3.87 per million British thermal units. UNG was also testing its short-term support at the 50-day simple moving average.

Dimming the natural gas outlook, the latest weather forecasts pointed to mild conditions leading to below-average gas-weighted degree days through the end of the month, the Natural Gas Intelligence reports.

“Overnight weather model guidance trended significantly more bearish, as all weather model runs showed ridging able to build across the East in the long-range that would prevent GWDDs from rising back to season averages into the end of December,” according to the Bespoke Weather Services. There was a “large spread across models” in the latest runs, with the American guidance coming in the coldest as the European “showed even more pronounced warmth with sustained ridging that only looks to begin to be disrupted into early January.”

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