Investing.com - Natural gas futures dropped on Friday after updated weather-forecasting models scaled back on the reach inbound winter storms will have over the U.S. in the coming days, which should curb demand for the heating fuel.
On the New York Mercantile Exchange, natural gas futures for delivery in January were down 4.60% at $3.475 per million British thermal units during U.S. trading. The commodity hit a session low of $3.455, and a high of $3.676.
The January contract settled down 1.62% on Thursday to end at $3.642 per million British thermal units.
Natural gas futures were likely to find support at $3.379 per million British thermal units, the low from Nov. 5, 2013, and resistance at $3.805, Thursday's high.
Winter weather systems are due to push into the U.S. from Canada in the coming days, though a good chunk of the central and eastern portions of the country may avoid the brunt of icy temperatures.
"Weather conditions are expected to rapidly change beginning Monday as a weather system tracks into the northern Plains and then pushes colder temperatures deep into the central U.S., which will aid in the development of a strong storm that will track across the country Dec. 23rd and 24th with increasing rain, snow, and strong winds," Natgasweather.com reported in its Friday Midday Update.
"But as we have been mentioning, this system will only tap a modest amount of cold air compared to following ones. In addition, the core of the low is likely to stall just before reaching the Northeast. This would allow more of the precipitation to fall as rain along the cold front with lesser snow amounts into the cold air."
Investors continued to digest Thursday's week supply report.
The U.S. Energy Information Administration said that natural gas storage fell by 64 billion cubic feet last week, exceeding expectations for a decline of 60 billion after a drop of 51 billion in the previous week, which sent prices rising earlier.
Inventories fell by 6 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 258 billion cubic feet.
Total U.S. natural gas storage stood at 3.295 trillion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were up 5.18% at $57.18 a barrel, while heating oil for January delivery were up 1.80% at $1.9736 per gallon.