Investing.com - U.S. natural gas prices were down sharply on Monday, as forecasts showed a return to milder weather in the second half of January after a polar blast last week.
On the New York Mercantile Exchange, natural gas for delivery in February tumbled 10.7 cents, or 3.65%, to trade at $2.839 per million British thermal units during U.S. morning hours, after hitting a daily low of $2.832.
On Friday, natural gas tacked on 1.9 cents, or 0.65%, to settle at $2.946. Despite Friday's gains, Nymex natural gas prices lost 5.7 cents, or 1.89%, on the week, the seventh consecutive weekly decline.
Futures were likely to find support at $2.816 per million British thermal units, the low from January 8, and resistance at $2.990, the high from January 9.
Updated weather forecast models continued to call for frigid temperatures in the key Northeast and Midwest markets in the next three days, boosting near-term demand expectations for the heating fuel.
However, extended forecasts showed higher readings were expected for most of the nation from January 16 through January 20.
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 next storage report is slated for release on Thursday, January 15, with analysts expecting a decline of 192 billion cubic feet for the week ending January 9.
Inventories fell by 268 billion cubic feet in the same week a year earlier, while the five-year average change is a drop of 190 billion cubic feet. Natural gas storage in the U.S. fell by 131 billion cubic feet last week.
Total U.S. natural gas storage stood at 3.089 trillion cubic feet, 7.4% above year-ago levels and 2.1% below the five-year average for this time of year.
Natural gas prices are down almost 38% since mid-November as an unusually mild start to winter limited demand while production soared.
Elsewhere on the Nymex, crude oil for delivery in February sank $2.20, or 4.55%, to trade at $46.16 a barrel, while heating oil for February delivery slumped 2.4% to trade at $1.662 per gallon.
