Investing.com - Natural gas futures plunged on Thursday, after data showed that U.S. natural gas supplies fell broadly in line with market expectations last week.
Meanwhile, 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 on Wednesday.
On the New York Mercantile Exchange, natural gas futures for delivery in March tumbled to a session low of USD5.116 per million British thermal units, before trimming losses to trade at USD5.142 during U.S. morning trade, down 5.85%.
Nymex gas prices traded at USD5.150 prior to the release of the supply data.
The March contract rallied to USD5.486 per million British thermal units on Wednesday, the highest since January 2010, before paring gains to settle at USD5.465, up 10.61%.
Natural gas futures were likely to find support at USD4.804 per million British thermal units, the low from January 29 and resistance at USD5.486, the high from January 29.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 24 fell by 230 billion cubic feet, compared to expectations for a decline of 236 billion cubic feet.
Gas supplies fell by 191 billion cubic feet during the same week a year earlier, while the five-year average change for the week is a decline of 162 billion cubic feet.
Total U.S. natural gas storage stood at 2.193 trillion cubic feet. Stocks were 637 billion cubic feet less than last year at this time and 437 billion cubic feet below the five-year average of 2.630 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 269 billion cubic feet below the five-year average, following net withdrawals of 124 billion cubic feet.
Stocks in the Producing Region were 121 billion cubic feet below the five-year average of 924 billion cubic feet after a net withdrawal of 84 billion cubic feet.
Meanwhile, updated weather forecasting models pointed to moderating temperatures that would curb demand for the heating fuel.
Nymex gas futures are on track to post a gain of approximately 18% in January 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.
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.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March rose 0.85% to trade at USD98.20 a barrel, while heating oil for March delivery shed 0.35% to trade at USD3.010 per gallon.