Investing.com - Natural gas futures dropped from highs not seen since 2010 on Monday after updated weather-forecasting models called for seasonably mild temperatures to edge out a cold snap that sent prices soaring last week.
On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD4.758 per million British thermal units during U.S. trading, down 4.81%. The commodity hit session high of USD5.198 and a low of USD4.751.
The February contract settled up 9.15% on Friday to end at USD4.998 per million British thermal units.
Natural gas futures were likely to find support at USD4.290 per million British thermal units, the low from Jan. 21, and resistance at USD5.245, Friday's high, the highest since 2010.
A recent blast of cold air that gripped the eastern U.S. will see reinforcements through the end of January, though normal to above-normal temperatures could reach the heavily populated eastern U.S. in the first half of February, which sparked a round of profit taking.
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.
Total U.S. natural gas storage stood at 2.423 trillion cubic feet as of last week, approximately 13% below the five-year average for this time of year.
Natural-gas inventories have fallen by 1.411 trillion cubic feet since Nov. 8 as frigid winter temperatures in the U.S. led households to burn more fuel in furnaces to heat their homes.
Some expect supplies at the end of the winter heating season in March to be at their lowest in six years.
Early withdrawal estimates for this week’s storage data range from 170 billion cubic feet to 239 billion cubic feet, compared to a drop of 191 billion cubic feet during the same week a year earlier.
The five-year average change for the week is a decline of 162 billion cubic feet.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in natural gas futures in the week ending Jan. 21.
Net longs totaled 154,643 contracts, up 17.2% from net longs of 128,072 in the previous week.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were down 1.10% and trading at USD95.58 a barrel, while heating oil for March delivery were down 1.46% and trading at USD2.9718 per gallon.