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.

Outside of “modest increases” in liquefied natural gas feed gas demand, the sharp move higher Friday “occurred despite notable further deterioration in the fundamental picture for natural gas,” Rubin said. 

Forecasts have lowered heating demand...