Investing.com - U.S. natural gas futures rallied more than 2% on Friday, as frigid winter temperatures and some snow was expected to return across parts of the U.S. Northeast and Midwest in the coming days.
On the New York Mercantile Exchange, natural gas futures for delivery in April rose 2.17%, or 9.8 cents, on Friday to close the week at $4.609 per million British thermal units.
The April contract fell to $4.441 per million British thermal units on Thursday, the lowest since January 22.
Natural gas prices regained strength on Friday after updated weather-forecasting models called for severe cold weather across the eastern and central U.S. during the next three-to-five days.
Futures were likely to find support at $4.441 per million British thermal units, the low from February 27 and resistance at $4.774, the high from February 25.
On the week, Nymex natural gas prices plunged 24.87%, the largest weekly decline since December 1996, as the fierce U.S. winter weather that has supported natural gas demand gave way to milder temperatures, triggering a selloff in futures.
For the month, natural gas prices retreated 5.5%.
Prices rallied to a more than five-year high of $6.493 per million British thermal units on February 20 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.
Total U.S. natural gas storage stood at 1.348 trillion cubic feet as of last week, the lowest for this time of year since 2004, following a withdrawal of 95 billion cubic feet, below expectations for a decline of 107 billion cubic feet.
Early withdrawal estimates for this week''s storage data ranged from 140 billion cubic feet to 174 billion cubic feet, which is mostly above the year-ago draw of 149 billion cubic feet and well above the five-year average draw of 105 billion.
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.
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 February 25.
Net longs totaled 170,972 contracts, down 1.3% from net longs of 173,214 in the previous week.
Elsewhere in the energy complex, light sweet crude oil futures for April delivery settled at $102.59 a barrel by close of trade on Friday, up 0.38% on the week.
Meanwhile, heating oil for April delivery lost 2.42% on the week to settle at $3.022 per gallon by close of trade Friday.