Investing.com - Natural gas futures came off earlier lows in volatile session on Tuesday amid demand from bottom fishers who viewed the commodity as oversold on reports of a thawing trend for the eastern U.S.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at $4.714 per million British thermal units during U.S. trading, up 2.03%. The commodity hit session high of $4.744 and a low of $4.537.
The April contract settled down 7.82% on Monday to end at $4.620 per million British thermal units.
Natural gas futures were likely to find support at $4.537 per million British thermal units, the earlier low, and resistance at $5.207, Monday's high.
A powerful blast of cold air will shoot across the northern U.S. states this week, through in the first and second week of March, warmer temperatures may return.
Temperatures could even climb higher than once expected around March 7, according to updated weather-forecasting models.
Prices dropped on the news, though bargain hunters snapped up nicely-priced positions in a whipsaw session.
The March contract is due to expire at the end of Wednesday’s trading session. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Nymex natural gas prices rallied 15% last week, the second consecutive weekly gain, as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel to heat their homes.
Total U.S. natural gas storage stood at 1.443 trillion cubic feet as of last week, the lowest for this time of year since 2004.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers increased their bullish bets in natural gas futures in the week ending February 18.
Net longs totaled 173,214 contracts, up 5.35% from net longs of 163,943 in the previous week.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April were down 1.09% and trading at $101.70 a barrel, while heating oil for April delivery were down 0.37% and trading at $3.0389 per gallon.