Investing.com - Natural gas futures dropped on Friday after frigid U.S. temperatures gave way to milder mercury readings, leaving markets betting that demand for heating will wane across the country.
On the New York Mercantile Exchange, natural gas futures for delivery in December were down 4.90% at $4.269 per million British thermal units during U.S. trading. The commodity hit a session low of $4.260, and a high of $4.531.
The December contract settled up 2.70% on Thursday to end at $4.489 per million British thermal units.
Natural gas futures were likely to find support at $4.113 per million British thermal units, Monday's low, and resistance at $4.544, the high from Nov. 10.
A blast of cold air has moved out for much of the U.S., with milder temperatures settling in, prompting investors betting that thermal power plants will burn less natural gas as demand for heating falls.
While more shots of cold air are due to sweep across the country into early December, updated weather-forecasting models earlier Friday scaled back on their intensity, which sent prices tumbling.
Investors also continued to digest Thursday's weekly U.S. supply report.
The U.S. Energy Information Administration reported that natural gas storage in the U.S. in the week ending Nov. 14 fell by 17 billion cubic feet, more than expectations for a decline of 12 billion and compared to a gain of 40 billion in the previous week.
The five-year average change for the week is a decrease of 10 billion cubic feet.
Total U.S. natural gas storage stood at 3.594 trillion cubic feet. Stocks were 201 billion cubic feet less than last year at this time and 244 billion cubic feet below the five-year average of 3.838 trillion cubic feet for this time of year.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January were up 0.67% at $76.36 a barrel, while heating oil for December delivery were up 0.75% at $2.3978 per gallon.