Investing.com - Natural gas futures sank on Tuesday, pulling back sharply from two-month highs as updated weather forecasts showed a return to seasonal temperatures after an extreme cold spell in the eastern U.S.
Front-month U.S. natural gas futures tumbled 13.7 cents, or around 4.3%, to $3.062 per million British thermal units (btu) by 8:10AM ET (1310GMT). It touched its best level since early Nov. 15 at $3.224 last Friday.
U.S. gas futures did not settle on Monday due to the Martin Luther King Day holiday.
Below freezing temperatures will continue to linger across most parts of the Northeast through Jan. 20, with light snow expected throughout the region.
However, Northeast temperatures were expected to return to seasonal levels from Jan. 21-to-28, with mild conditions dominating during the period, according to updated weather forecasting models.
Natural gas futures soared nearly 15% last week, after data showed the largest withdrawal on record of U.S. supplies in storage as freezing temperatures boosted heating demand.
Natural gas prices typically rise during the winter months as colder weather sparks indoor-heating demand. The heating season from November through March is the peak demand period for U.S. gas consumption.
Market participants looked ahead to this week's storage data due on Thursday, which is expected to show a draw in a range between 190 and 205 billion cubic feet (bcf) in the week ended Jan. 12.
That compares with a whopping decline of 359 bcf in the preceding week, a fall of 243 bcf a year earlier and a five-year average drop of 203 bcf.
Total natural gas in storage currently stands at 2.767 trillion cubic feet (tcf), according to the U.S. Energy Information Administration. That figure is 415 bcf, or around 13.0%, lower than levels at this time a year ago and 382 bcf, or roughly 12.1%, below the five-year average for this time of year.