Investing.com - Natural gas futures edged lower on Monday, as temperatures were expected to warm in the coming days following the arctic chill that settled through most of the nation during January, dampening heating demand.
On the New York Mercantile Exchange, natural gas futures for delivery in March fell by 3% to USD4.629 per million British thermal units, the lowest since January 22, before trimming losses to trade at USD4.749 during U.S. morning trade, down 0.55%.
The March contract tumbled 3.16% on Friday to settle at USD4.775 per million British thermal units.
Natural gas futures were likely to find support at USD4.434 per million British thermal units, the low from January 22 and resistance at USD5.049, the high from February 5.
Updated weather forecasting models pointed to moderating temperatures that would curb demand for the heating fuel.
MDA Weather Services said it expects a "more aggressive warm up" in the Midwest by late next week, while a "more substantial warmth" will build over the central U.S. in its 11- to 15-day forecast.
Bearish speculators are betting that milder weather will decrease demand for the heating fuel.
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.
Meanwhile, U.S. supply levels also remained in focus. Total U.S. natural gas storage fell by 262 billion cubic feet last week to 1.923 trillion cubic feet, approximately 22% below the five-year average for this time of year and nearly 29% below last year’s unusually high level.
Natural-gas inventories have fallen sharply since November 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.
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 February 4.
Net longs totaled 151,338 contracts, down 11.5% from net longs of 171,029 in the previous week.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March rose 0.05% to trade at USD99.94 a barrel, while heating oil for March delivery lost 1.1% to trade at USD3.017 per gallon.