Natural gas gains on forecasts for a new U.S. cold snap

Natural gas prices rose on Monday after updated weather forecasts called for a fresh blast of below-normal temperatures to push across the eastern U.S. in the coming week. On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.553 per million British thermal units during U.S. trading, up 1.91%.

The commodity hit a session low of USD4.514 and a high of USD4.577.

The January contract settled up 0.49% at USD4.467 per million British thermal units on Friday. Futures were likely to find support at USD4.196 per million British thermal units, Tuesday's low, and resistance at USD4.983, the high from June 9, 2011.

Cold air is expected to shoot down over the Midwest midway through the week and trek east, which should send businesses and homes cranking up their heating, thus increasing the demand for natural gas at the country's thermal power generators.

In its 8-14 day forecast, Natgasweather.com predicted cold and wintry weather for the Midwest and Northeast, though the West Coast will see mild and drier conditions.

Natgasweather.com added high-use eastern U.S. states will continue to draw above-normal natural gas and energy during the time frame, while the central and even the southeastern U.S. should see very cold conditions as well.

Meanwhile, U.S. supply levels remained in focus. Total U.S. natural gas storage stood at 3.248 trillion cubic feet as of last week, more than 13% below last year's unusually high level and nearly 7% below the five-year average for this time of year.

Early withdrawal estimates for this week's storage data range from 135 billion cubic feet to 177 billion cubic feet, compared to a drop of 74 billion cubic feet during the same week a year earlier.

The five-year average change for the week is a decline of 125 billion cubic feet.

Supplies fell by 285 billion cubic feet last week, the biggest weekly withdrawal on record.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were down 0.41% and trading at USD98.91 a barrel, while heating oil for January delivery were down 0.36% and trading at USD3.0670 per gallon.