Natural gas dips as forecasts point to U.S. warming trend

Investing.com - Natural gas prices edged lower on Monday after updated weather-forecasting models pointed to warmer temperatures settling in across much of the central and eastern U.S., though losses were limited due to calls for another shot of cold air to sweep across the country.

On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.274 per million British thermal units during U.S. trading, down 0.71%.

The commodity hit a session high of 4.378 and a low of 4.267, with support seen at 4.208, Friday's low, and resistance seen at 4.388, Friday's high.

The February contract settled down 0.39% lower on Friday to end at USD4.304 per million British thermal units.

A winter storm system that dumped snow across the central and northeastern U.S. left frigid temperatures in its wake, which hiked demand for natural gas at the country's thermal power plants as homes and businesses cranked up their heating.

By Monday, natural gas prices fell on forecasts for a thawing trend, though longer-range models called for a return of colder temperatures.

In its 8-14 day forecast, Natgasweather.com reported that the milder weather could edge out around Jan. 13 after a strong cold blast of cold air pushes through from the Rockies to the Plains and into the eastern U.S. afterwards.

Freezing temperatures and snowfall could dip into the southern U.S., including northern Texas and the Tennessee Valley, Natgasweather.com added.

U.S. supply levels also remained in focus. Total U.S. natural gas storage stood at 3.071 trillion cubic feet as of last week, approximately 16% below last year's unusually high level and nearly 9% below the five-year average for this time of year.

Early withdrawal estimates for this Friday’s storage data range from 110 billion cubic feet to 150 billion cubic feet, compared to a drop of 126 billion cubic feet during the same week a year earlier. The five-year average change for the week is a decline of 121 billion cubic feet.
 
Nymex natural gas prices have been well-supported in recent weeks, as chilly early winter weather helped drive prices to a two-and-a-half year high of USD4.578 on December 23. Nymex gas prices ended 2013 with a gain of nearly 22%, the biggest annual increase since 2005.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were down 0.49% and trading at USD93.50 a barrel, while heating oil for February delivery were up 0.39% and trading at USD2.9508 per gallon.