Natural gas futures were off sharply in early trading Monday, erasing gains recorded alongside front-month expiration late last week as analysts pointed to warming forecasts and weaker fundamentals. The January Nymex contract was down 51.5 cents to $4.962/MMBtu at around 8:40 a.m. ET.

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The December contract rolled off the board on Friday with a 37.9-cent rally, a move EBW Analytics Group senior energy analyst Eli Rubin characterized as a “settlement-induced price spike” that had little fundamental push behind it.

Before the Thanksgiving holiday, natural gas futures rallied on Wednesday for a second consecutive session ahead of December options expiration. Robust demand for U.S. exports and a government inventory report that pointed to tightening balances helped propel prices...