Investing.com - U.S. natural gas futures ended Friday’s session at a two-month low, amid concerns that the arrival of spring will bring warmer temperatures throughout the U.S. and cut into demand for heating.
On the New York Mercantile Exchange, natural gas futures for delivery in May fell to a session low of $4.275 per million British thermal units on Friday, the weakest level since January 20.
Natural gas prices settled at $4.297 by close of trade on Friday, down 1.2%, or 5.2 cents.
The May contract tumbled 2.45%, or 10.9 cents, on Thursday to settle at $4.349 per million British thermal units.
Futures were likely to find support at $4.237 per million British thermal units, the low from January 20 and resistance at $4.447, the high from March 20.
On the week, Nymex natural gas prices lost 2.89%, or 12.8 cents, the second consecutive weekly decline, as investors bet seasonably mild weather typical of this time of year will curb demand for both heating and air conditioning across much of the U.S.
Natural gas sold off on Thursday after weekly supply data showed that natural gas storage in the U.S. fell by 48 billion cubic feet last week, compared to expectations for a decline of 59 billion cubic feet.
Supplies fell by 74 billion cubic feet in the same week a year earlier while the five-year average change for the week is a drop of 30 billion cubic feet.
Total U.S. natural gas storage stood at 953 billion cubic feet, the lowest for this time of year since 2004.
Early withdrawal estimates for next week’s storage data range from a decline of 36 billion cubic feet to 76 billion cubic feet, compared to a drop of 90 billion cubic feet during the same week a year earlier.
The five-year average change for the week is a decline of 7 billion cubic feet.
Meanwhile, updated weather-forecasting models called for above-normal temperatures across many densely populated areas in the U.S. in the next three to five days.
Spring and fall see the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.
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 March 18.
Net longs totaled 138,640 contracts, down 7.1% from net longs of 149,267 in the previous week.
Elsewhere in the energy complex, light sweet crude oil futures for May delivery settled at $99.46 a barrel by close of trade on Friday, up 0.57%, or 57 cents, on the week.
Meanwhile, heating oil for April delivery lost 2.24% on the week to settle at $2.913 per gallon by close of trade Friday.