Investing.com - U.S. natural gas prices declined for the fifth time in six sessions on Wednesday, as investors monitored near-term weather forecasts to gauge the strength of demand for the heating fuel.
On the New York Mercantile Exchange, natural gas for delivery in March fell by as much as 6.5 cents, or 2.36%, to hit a session low of $2.689 per million British thermal units, before trading at $2.694 during U.S. morning hours, down 6.0 cents, or 2.2%.
Futures were likely to find support at $2.608 per million British thermal units, the low from February 2, and resistance at $2.924, the high from January 29.
Updated weather forecast models called for frigid temperatures in the key Northeast and Midwest markets in the coming days.
However, extended weather forecasting models showed that below-normal temperatures 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.
Meanwhile, the U.S. Energy Information Administration's weekly storage report slated for release on Thursday is expected to show a decline of 123 billion cubic feet for the week ending January 30.
Inventories fell by a whopping 259 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 165 billion cubic feet. Natural gas storage in the U.S. fell by 94 billion cubic feet last week.
Total U.S. natural gas storage stood at 2.543 trillion cubic feet as of last week, 15% above year-ago levels, the widest surplus since August 2012, while the deficit to the five-year average narrowed to just 3% from a record 55% last March.
A day earlier, natural gas rallied 7.4 cents, or 2.76%, to settle at $2.754 as investors returned to the market to seek cheap valuations in wake of recent losses.
Prices touched $2.608 on Monday, a level not seen since August 2012, as investors reacted to daily changes in weather patterns.
Nymex natural gas prices lost 16.7 cents, or 9.03%, last week, 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.
Elsewhere on the Nymex, crude oil for delivery in March tumbled $2.35, or 4.43%, to trade at $50.70 a barrel, while heating oil for March delivery lost 1.82% to trade at $1.812 per gallon.