Investing.com - U.S. natural gas futures declined for the third consecutive session on Friday to hit the lowest level in 28 months, as investors assessed the near-term demand outlook amid ample supplies.
On the New York Mercantile Exchange, natural gas for delivery in March retreated 2.8 cents, or 1.03%, on Friday to settle at $2.691 per million British thermal units by close of trade.
Earlier in the day, prices touched $2.637, a level not seen since August 2012.
Futures were likely to find support at $2.610 per million British thermal units, the low from August 29, 2012, and resistance at $2.924, the high from January 29.
For the week, Nymex natural gas prices lost 16.7 cents, or 9.03%, capping the ninth weekly decline in the past ten weeks.
Prices of the heating fuel plunged 15.9 cents, or 7.08%, in January, as an unusually mild start to winter limited demand while production soared.
Updated weather forecasting models said that below-normal temperatures in the East may give way to higher readings by the middle of February, dampening demand expectations for the heating fuel.
Bearish speculators are betting on the near-normal weather reducing winter demand for the heating fuel.
The heating season from November through March is the peak demand period for U.S. gas consumption.
On Thursday, natural gas lost 12.3 cents, or 4.33%, to end at $2.719 after a government report showed that U.S. natural gas supplies fell less than forecast last week, underlining concerns over weak demand.
The U.S. Energy Information Administration said in its weekly report that natural gas storage fell by 94 billion cubic feet, compared to expectations for a decline of 113 billion and slowing from a drop of 216 billion in the previous week.
Inventories fell by 219 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 168 billion cubic feet.
Total U.S. natural gas storage stood at 2.543 trillion cubic feet, 15% above year-ago levels, the widest surplus since August 2012.
Natural gas prices have been extremely volatile in recent sessions as investors react to daily changes in weather patterns. Futures have either gained or declined more than 1% in the past ten trading days.
Elsewhere on the Nymex, crude oil for March delivery settled at $48.24 a barrel by close of trade on Friday, up $3.04, or 5.81%, on the week.
Meanwhile, heating oil for March delivery rallied 4.92% on the week to settle at $1.700 per gallon by close of trade Friday.