Natural gas futures drop on supply report, weather forecasts

Investing.com - Natural gas futures plummeted on Thursday on a bearish inventory report as well as weather forecasts for a thawing trend for much of the U.S.On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.065 per million British thermal units during U.S. trading, down 3.59%. The commodity hit session high of USD4.193 and a low of USD4.060.The February contract settled down 1.93% on Wednesday to end at USD4.216 per million British thermal units. Natural gas futures were likely to find support at USD3.951 per million British thermal units, the low from Dec. 5, and resistance at USD4.428, Tuesday's high.The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Jan. 3 fell by 157 billion cubic feet, towards the lower end of expectations, especially in wake of a blast of cold air that sent temperatures falling to dangerously cold levels in many cities.Inventories fell by 191 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 131 billion cubic feet.Total U.S. natural gas storage stood at 2.817 trillion cubic feet. Stocks were 528 billion cubic feet less than last year at this time and 315 billion cubic feet below the five-year average of 3.132 trillion cubic feet for this time of year.The report showed that in the East Region, stocks were 239 billion cubic feet below the five-year average, following net withdrawals of 98 billion cubic feet. Stocks in the Producing Region were 40 billion cubic feet below the five-year average of 1.059 billion cubic feet after a net withdrawal of 42 billion cubic feet.Meanwhile, updated weather forecasting models called for a warming trend across much of the U.S. in the coming week, which sent prices lower.A fresh blast of cold air should return and edge out milder temperatures around Jan. 14, according to Natgasweather.com, and while models wanted to call for another severe round of cold weather that would bring below-zero temperatures to portions of the Midwest and Northeast and hard freezes in the Southeast, investors avoided the commodity on Thursday to digest supply data.Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were down 0.58% and trading at USD91.79 a barrel, while heating oil for February delivery were down 0.69% and trading at USD2.9291 per gallon.