Natural gas futures fluctuate near 28-month low with weather in focus

Investing.com - U.S. natural gas prices wavered between positive and negative territory in volatile trade on Tuesday, as investors monitored shifting weather forecasts for the next two weeks.

On the New York Mercantile Exchange, natural gas for delivery in February tacked on 0.6 cents, or 0.23%, to trade at $2.889 per million British thermal units during U.S. morning hours.

Prices traded in a range between $2.814, a level not seen since September 2012, and $2.943.

On Monday, natural gas plunged 12.1 cents, or 4.03%, to settle at $2.882.

Futures were likely to find support at $2.805 per million British thermal units, the low from January 2, and resistance at $3.176, the high from January 5.

Updated weather forecast models continued to call for frigid temperatures in the key Northeast and Midwest markets in the next three-to-five 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.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on winter heating demand.

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 weekly storage report slated for release on January 8 is expected to show a drop of 133 billion cubic feet for the week ending January 2.

Total U.S. natural gas storage stood at 3.220 trillion cubic feet, 2.5% below year-ago levels and 7.8% below the five-year average for this time of year.

Elsewhere on the Nymex, crude oil for delivery in February tumbled $1.29, or 2.58%, to trade at $48.75 a barrel, while heating oil for February delivery inched up 0.07% to trade at $1.750 per gallon.