Investing.com - Natural gas futures dropped on Thursday as the proximity of spring's arrival coupled with a lackluster supply report sent investors selling and jumping to the sidelines.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at $4.407 per million British thermal units during U.S. trading, down 1.86%. The commodity hit session high of $4.496 and a low of $4.382.
The April contract settled down 2.50% on Wednesday to end at $4.490 per million British thermal units.
Natural gas futures were likely to find support at $4.205 per million British thermal units, the low from Jan. 19, and resistance at $4.732, Monday'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 March 7 fell by 195 billion cubic feet, just shy of expectations for a decline of 196 billion cubic feet.
Supplies fell by 145 billion cubic feet in the same week a year earlier, while the five-year average is a decline of 95 billion.
Total U.S. natural gas storage stood at 1.001 trillion cubic feet, the lowest for this time of year since 2004.
Stocks were 958 billion cubic feet less than last year at this time and 858 billion cubic feet below the five-year average of 1.859 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 395 billion cubic feet below the five-year average, following net withdrawals of 95 billion cubic feet.
Stocks in the Producing Region were 335 billion cubic feet below the five-year average of 737 billion cubic feet after a net withdrawal of 79 billion cubic feet.
Seasonably mild temperatures are expected to settle in the eastern U.S. in the coming days to mark spring's arrival.
Updated weather-forecasting models called for above-normal temperatures across many densely populated areas in the U.S. in the next three to five days.
Spring and fall see the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs the need for heating and air conditioning.
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.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April were down 0.05% and trading at $97.94 a barrel, while heating oil for April delivery were down 0.65% and trading at $2.9066 per gallon.