Investing.com - Natural gas futures dropped on Monday after updated weather-forecasting models continued to call for a thawing trend to settle in over much of the U.S. through the third week of February.
On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD4.586 per million British thermal units during U.S. trading, down 3.96%. The commodity hit session high of USD4.785 and a low of USD4.568.
The March contract settled down 3.16% on Friday to end at USD4.775 per million British thermal units.
Natural gas futures were likely to find support at USD4.205 per million British thermal units, the low from Jan. 19, and resistance at USD5.734, Wednesday''s high.
Weather forecasting services called for moderating temperatures to settle in over the eastern half of the country during the next two weeks, which should curb demand for commodity at the nation''s thermal power plants.
Mild temperatures this time of year prompt homes and businesses to cut back on their heating.
MDA Weather Services said it expects a "more aggressive warm up" in the Midwest by late next week, while a "more substantial warmth" will build over the central U.S. in its 11-to-15-day forecast.
Reports that pockets of the central and eastern U.S. could see above-normal temperatures fueled the selloff as well.
Meanwhile, U.S. supply levels also remained in focus. Total U.S. natural gas storage fell by 262 billion cubic feet last week to 1.923 trillion cubic feet, approximately 22% below the five-year average for this time of year and nearly 29% below last year’s unusually high level.
Natural-gas inventories have fallen sharply since November as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers reduced their bullish bets in natural gas futures in the week ending Feb. 4.
Net longs totaled 151,338 contracts, down 11.5% from net longs of 171,029 in the previous week.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were up 0.38% and trading at USD100.26 a barrel, while heating oil for March delivery were down 1.44% and trading at USD3.0065 per gallon.
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