Nat Gas Plunges Despite Impending Northeast Winter Storm

Winter Storm 'Nemo' Update

With the Northeast preparing for the first major snow storm of the year, natural gas futures plummeted nearly 4 percent on Thursday, after a government report showed a smaller-than-expected decline in weekly gas supplies.

Natural gas futures fell 13 cents to a session low of $3.28 per million BTUs. The U.S. Energy Information Administration reported natural gas supplies fell by 118 billion cubic feet last week, less than consensus estimates of 122-126 bcf. The decline in natural gas in storage was greater than the same week in 2012, but far less than usual for this time of year.

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Natural gas prices had climbed to a high of $3.45 in the previous session on early forecasts for the winter storm that is expected to blanket much of the Northeast with several feet of snow on Friday.

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But overall, temperatures have been above normal this winter. Traders say this week's weather was already priced into the market and the focus of today's session was on the storage data. However, analysts say the slide could be short lived as forecasts call for below-normal temperatures for much of the country in the next 11 to 15 days.

—By CNBC's Sharon Epperson; Follow her on Twitter: @sharon_epperson