NEW YORK (Dow Jones)--Natural gas futures wavered Monday as traders weighed book-squaring against abundant supplies and a mild weather outlook.

Natural gas for May delivery on the New York Mercantile Exchange was trading 2 cents lower, or 0.47%, at $4.237 a million British thermal units after opening 1.4 cents higher at $4.271/MMBtu.

Gas futures were getting some support from book-squaring as traders bought back previously sold positions ahead of the May contract expiration on Wednesday. Futures were also lifted by bargain-buying, with prices about 25% below where they were trading at the beginning of the year.

"We couldn't make any new lows last week, which was key," said Mike Rose, the director of the energy trading desk for Angus Jackson Inc. in Fort Lauderdale, Fla. "On a technical level, this market looks fairly attractive."

Gas futures have also gotten a boost from reduced drilling activity as producers respond to low prices, and from data pointing to a gradual strengthening of the economy that could lift energy demand, wrote Drew Wozniak, an analyst with ICAP Energy in Louisville, Ky., in a note to clients Monday. Oil-field services company Baker Hughes Inc. (BHI) reported Friday that the number of rigs drilling for gas in the U.S. last week was 956, a decrease of 17 rigs from the previous week.

"So from a macro perspective, it looks like the supply and demand trends are favoring the bulls," Wozniak wrote.

But moderate temperatures and ample gas output from onshore shale-rock formations continued to place downward pressure on prices Monday. Mild spring weather has led to large injections of gas into underground storage facilities each week. MDA EarthSat, a Rockville, Md., private forecaster, was predicting above-normal temperatures across most of the eastern half of the U.S. from May 1 to May 5. From May 6 to May 10, MDA was forecasting mostly normal temperatures in the northern and central U.S., with above-normal temperatures across the southern tier of the country and some below-normal temperatures in the northern Midwest and Great Lakes region.

Total gas in U.S. storage as of April 16 was 1.829 trillion cubic feet, about 18.5% above the five-year average and 5.5% above last year's level for the same week.

-By Christine Buurma, Dow Jones Newswires; 212-416-2143;