Natural gas falls as investors take profits

Investing.com - Natural gas futures fell on Friday after investors locked gains from recent blasts of cold weather and sold the commodity for profits.

On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.307 per million British thermal units during U.S. trading, down 1.72%. The commodity hit session high of USD4.384 and a low of USD4.298.

The February contract settled up 1.32% on Thursday to end at USD4.382 per million British thermal units. Natural gas futures were likely to find support at USD4.119 per million British thermal units, Monday's low, and resistance at USD4.495, Thursday's high.

Repeated blasts of cold air have sent gas prices gaining in recent sessions as well as weather forecasts calling for reinforcing shots of wintry weather to sweep across the country through the end of January and hike demand for the commodity at the nation's thermal power plants.

By Friday, investors viewed below-normal temperatures as already priced into trading strategies and sold natural gas futures for profits.

Weekly inventory data fueled profit taking as well.

While a recent freeze took its toll on inventories, markets were hoping for a bigger draw.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended January 10 fell by 287 billion cubic feet, the largest drop on record though still below expectations for a decline of 301 billion cubic feet.

The five-year average change for the week is a decline of 159 billion cubic feet. The previous record drop was a decrease of 285 billion cubic feet in the seven days ended December 13, according to Energy Information Administration data.

Total U.S. natural gas storage stood at 2.530 trillion cubic feet. Stocks were 659 billion cubic feet less than last year at this time and 443 billion cubic feet below the five-year average of 2.973 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 292 billion cubic feet below the five-year average, following net withdrawals of 149 billion cubic feet.

Stocks in the Producing Region were 104 billion cubic feet below the five-year average of 1.016 billion cubic feet after a net withdrawal of 107 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were up 0.29% and trading at USD94.37 a barrel, while heating oil for February delivery were up 1.43% and trading at USD3.0271 per gallon.