Investing.com - Natural gas futures plunged on a bearish supply report earlier Thursday, though bottom fishers swept in and brought prices back into positive territory on the view the asset was oversold.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at $4.550 per million British thermal units during U.S. trading, up 0.19%. The commodity hit session high of $4.565 and a low of $4.447.
The April contract settled down 3.20% on Wednesday to end at $4.541 per million British thermal units.
Natural gas futures were likely to find support at $4.205 per million British thermal units, the low from Jan. 19, and resistance at $5.207, Monday''s high.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending Feb. 21 fell by 95 billion cubic feet, short of market expectations for a decline of 107 billion cubic feet.
Total U.S. natural gas storage stood at 1.348 trillion cubic feet. Stocks were 905 billion cubic feet less than last year at this time and 711 billion cubic feet below the five-year average of 2.059 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 361 billion cubic feet below the five-year average, following net withdrawals of 78 billion cubic feet.
Stocks in the Producing Region were 251 billion cubic feet below the five-year average of 775 billion cubic feet after a net withdrawal of 5 billion cubic feet.
Markets were expecting a recent cold snap would have taken its toll on supplies more than it did, which sparked a selloff until bottom fishing kicked in.
Prices also came under pressure after updated weather-forecasting models called for a return of milder temperatures across the eastern U.S.
The U.S. National Weather Service said that higher temperatures than previously forecast were expected in the Midwest from March 6 to March 10.
Prices rallied to over a five-year high of $6.493 per million British thermal units earlier in the week 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 April were down 0.47% and trading at $102.11 a barrel, while heating oil for April delivery were down 1.03% and trading at $3.0070 per gallon.