Investing.com - Natural gas futures were lower on Monday, as a break in the cold to milder weather prompted a correction in the market after a rapid price run-up which took prices to a four-year high last week.
On the New York Mercantile Exchange, natural gas futures for delivery in March fell to USD4.770 per million British thermal units, before trimming losses to trade at USD4.897 during U.S. morning trade, down 0.95%.
Natural gas futures were likely to find support at USD4.721 per million British thermal units, the low from January 31 and resistance at USD5.199, the high from January 27.
The March contract tumbled 1.36% on Friday to settle at USD4.943 per million British thermal units.
Updated weather forecasting models pointed to moderating temperatures that should curb demand for the heating fuel. Temperatures are expected to warm during the first two weeks of February, following the arctic chill that settled through most of the nation during January.
Bearish speculators are betting that the milder weather will decrease demand for the heating fuel.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.
Meanwhile, U.S. supply levels also remained in focus. Total U.S. natural gas storage fell by 230 billion cubic feet last week to 2.193 trillion cubic feet, approximately 17% below the five-year average for this time of year.
Natural-gas inventories have fallen by nearly 40% 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 increased their bullish bets in natural gas futures in the week ending January 28.
Net longs totaled 171,029 contracts, up 9.6% from net longs of 154,643 in the previous week.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March fell 0.45% to trade at USD97.01 a barrel, while heating oil for March delivery dropped 0.85% to trade at USD2.971 per gallon.
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