Investing.com - U.S. natural gas prices declined on Monday, as investors locked in gains from a recent rally which took prices to an 11-week high as updated weather forecasting models pointed to freezing temperatures in the U.S. east coast until the end of the month.
Natural gas for delivery in February on the New York Mercantile Exchange dropped 5.2 cents, or 2.12%, to trade at $2.420 per million British thermal units as of 13:50 GMT, or 8:50AM ET.
On Friday, natural gas rallied to $2.495, the most since October 20, as bullish speculators wagered that cool winter weather will increase demand for the heating fuel in the near future. The heating season from November through March is the peak demand period for U.S. gas consumption.
Last week, futures soared 10.6 cents, or 5.78%, the third straight weekly gain. Prices are up more than 30% since hitting a 17-year low of $1.684 on December 18, as forecasts called for cool weather, following an unusually mild start to winter due to the El Niño weather phenomenon.
Natural gas storage in the U.S. fell by 113 billion cubic feet last week, according to the U.S. Energy Information Administration, more than expectations for a decline of 99 billion. That compared with a drawdown of 58 billion cubic feet in the prior week, 116 billion cubic feet in the same week last year, while the five-year average change for the week is a withdrawal of 129 billion cubic feet.
Total U.S. natural gas storage stood at 3.643 trillion cubic feet, 14.7% higher than levels at this time a year ago and 12.7% above the five-year average for this time of year.
The EIA's next storage report slated for release on Thursday, January 14 is expected to show a withdrawal of approximately 105 billion cubic feet for the week ending January 8.
Elsewhere on the Nymex, crude oil for delivery in February dipped 50 cents, or 1.52%, to trade at $32.65 a barrel, while heating oil for February delivery lost 1.18% to trade at $1.039 per gallon.