Investing.com - Natural gas futures surged more than 4% on Monday, amid speculation this week’s supply data will show a record drop.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.227 per million British thermal units during U.S. morning trade, up 4.3%. Nymex February gas futures rallied by as much as 4.5% earlier in the day to hit a session high of USD4.241.
The February contract fell to USD3.954 per million British thermal units on Friday, the weakest level since December 5, before turning higher to end at USD4.053 per million British thermal units, up 1.2%.
Natural gas futures were likely to find support at USD3.953 per million British thermal units, the low from January 10 and resistance at USD4.365, the high from January 8.
Early withdrawal estimates for this Thursday’s storage data range from 222 billion cubic feet to 303 billion cubic feet. The five-year average change for the week is a decline of 159 billion cubic feet.
The largest drop on record is a decrease of 285 billion cubic feet in the seven days ended December 13, Energy Information Administration data show.
Natural gas supplies fell by 157 billion cubic feet last week to hit 2.817 trillion cubic feet, approximately 16% below last year's unusually high level and nearly 10% below the five-year average for this time of year.
Meanwhile, updated weather forecasting models called for colder-than-normal temperatures in the week ahead. MDA Weather Services forecast cold weather will move into the Eastern half of the country over the next six-to-ten days.
Bullish speculators are betting that the cool weather will increase demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March fell 0.9% to trade at USD92.12 a barrel, while heating oil for February delivery inched up 0.3% to trade at USD2.948 per gallon.