Investing.com - Natural gas futures edged lower on Thursday, brushing off a bullish U.S. supply report on concerns inbound winter weather systems will not bring frigid enough temperatures needed to drive heating beyond normal for this time of year.
On the New York Mercantile Exchange, natural gas futures for delivery in January were down 1.73% at $3.638 per million British thermal units during U.S. trading. The commodity hit a session low of $3.616, and a high of $3.776.
The January contract settled up 1.48% on Wednesday to end at $3.706 per million British thermal units.
Natural gas futures were likely to find support at $3.606 per million British thermal units, Wednesday's low, and resistance at $3.824, last Friday's high.
Natural gas prices rose earlier on news of a bullish U.S. stockpile report but gave back gains on mild weather forecasts.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Dec. 5 fell by 51 billion cubic feet, more than expectations for a decline of 45 billion and compared to a drop of 22 billion in the previous week.
Inventories fell by 92 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 72 billion cubic feet.
Total U.S. natural gas storage stood at 3.359 trillion cubic feet. Stocks were 186 billion cubic feet less than last year at this time and 351 billion cubic feet below the five-year average of 3.710 trillion cubic feet for this time of year.
Gains were limited due to forecasts for mild temperatures, which should curb demand for heating.
While several winter weather systems will trek across the U.S. in the coming days, frigid temperatures should hover north of the Canadian border.
"While we mention all these weather systems, what we have yet to mention is how they are quite mild in nature, as the truly cold Arctic air will remain confined to far northern Canada and also where they are not tracking through, temperature anomalies are running 10-20F warmer than normal, such as over Texas and the central U.S.," Natgasweather.com reported in its Thursday Midday Update.
"With cold Canadian air absent, next week's draw will be show a much greater miss on the 5-year average compared to today's report. This will allow deficits to make up a very sizable chunk of ground. If the string of lighter than normal draws are to end, colder air is required, and the next opportunity for it continues to look to arrive beginning around December 22-24th."
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January were down 1.31% at $60.14 a barrel, while heating oil for January delivery were up 0.91% at $2.0736 per gallon.