The NYMEX December natural gas futures contract fell 17.7 cents to settle at $4.523/MMBtu Tuesday, retreating from Monday's gains.
The December contract traded between $4.274/MMBtu and $4.672/MMBtu.
S&P Global Platts Analytics data showed total US dry natural gas production decreased 0.5 Bcf Tuesday to 84.8 Bcf. Production is expected to remain flat over the next 14 days, averaging 84.9 Bcf/d, according to Platts Analytics data.
Tuesday's production drop was primarily driven by Texas Onshore, which fell 400 MMcf day on day to 20.1 Bcf Tuesday, Platts Analytics data showed.
US residential/commercial demand rose 3.1 Bcf to 41.7 Bcf Tuesday, with the Northeast and Southeast regions contributing 1.4 Bcf and 700 MMcf, respectively, of the 3.1-Bcf increase.
Platts Analytics average population-weighted temperatures across the US are forecast to be 6 degrees Fahrenheit below normal at 44 degrees Tuesday. Temperatures are forecast to be above normal across the US by Saturday before decreasing to below normal again by next Tuesday. Eight to 14 days out, population-weighted temperatures are forecast to be 44 degrees, 2 degrees below norms.
The recent price volatility demonstrates that the market is searching for support as it pivots into winter amid new supply/demand factors in the North American natural gas market.
"Right now the market is searching for big round numbers for continued support," said Jay Levine, an independent analyst at enerjay. "Where is the next big support from a technical perspective?"
Levine cited $4.25/MMBtu or $4.75/MMBtu as supportive numbers, adding that the price is unlikely to remain at $4.50/MMBtu.
Further out, the March contract settled at $4.125/MMBtu, losing 17 cents in trading Tuesday.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EST (2400 GMT).
