Natural gas futures held on to losses on Thursday, after data showed that U.S. natural gas supplies fell broadly in line with market expectations last week.

On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.163 per million British thermal units during U.S. morning trade, down 1.3%. Futures traded at USD4.161 prior to the release of the U.S. Energy Information Administration report.

Nymex February gas futures fell by as much as 2.1% earlier in the day to hit a session low of USD4.128, the weakest level since December 6. The February contract settled 1.93% lower on Wednesday to end at USD4.216 per million British thermal units.

Natural gas futures were likely to find support at USD4.103 per million British thermal units, the low from December 6 and resistance at USD4.365, the high from January 8.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 3 fell by 157 billion cubic feet, in line with expectations.

Inventories fell by 191 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 131 billion cubic feet.

Total U.S. natural gas storage stood at 2.817 trillion cubic feet. Stocks were 528 billion cubic feet less than last year at this time and 315 billion cubic feet below the five-year average of 3.132 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 239 billion cubic feet below the five-year average, following net withdrawals of 98 billion cubic feet.

Stocks in the Producing Region were 40 billion cubic feet below the five-year average of 1.059 billion cubic feet after a net withdrawal of 42 billion cubic feet.

Meanwhile, market players continued to focus on weather forecasts to gauge the strength of demand for the fuel.

Updated weather forecasting models called for frigid temperatures to give way to a thawing trend across a good portion of the eastern U.S. in the coming week. By Saturday a high of 51 degrees Fahrenheit was expected in New York according to weather service provider

Bearish speculators are betting that the mild 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.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February added 0.05% to trade at USD92.37 a barrel, while heating oil for February delivery was flat to trade at USD2.950 per gallon.

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