Investing.com - Natural gas futures were higher during U.S. morning trade on Tuesday, boosted by forecasts for warmer weather and recent indications major North American natural gas producers were cutting back on production in response to lower prices.
On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD2.482 per million British thermal units during U.S. morning trade, jumping 2.1%.
It earlier rose by as much as 2.5% to trade at a session high of USD2.497 per million British thermal units. Prices touched USD2.530 on May 11, the highest since March 1.
Gas prices regained strength after the National Weather Service's six- to 10-day outlook issued on Monday called for above-normal readings for most parts of the U.S.
Warmer-than-normal temperatures increase the need for gas-fired electricity to to power air conditioning, boosting demand for natural gas. Natural gas accounts for about a quarter of U.S. electricity generation.
Sentiment on the fuel has improved in recent weeks, after hitting a string of fresh 10-year lows for the most part of April.
Prices are up almost 25% since hitting a decade-low of USD1.902 on April 19, amid indications major North American natural gas producers were cutting back on production.
Speculation that utility providers in the U.S. were switching from pricier coal to cheaper natural gas provided further support over recent sessions.
However, prices could experience a near-term downside correction as traders remained concerned over elevated U.S. storage levels.
The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 30 billion cubic feet to 2.606 trillion cubic feet last week, up 44.2% from year ago levels and 44.5% higher than the five-year average.
Early injection estimates for this week’s storage data range from 52 billion cubic feet to 79 billion cubic feet, compared to last year's build of 86 billion cubic feet. The five-year average change for the week is an increase of 91 billion cubic feet.
If weekly stock builds through October match the five-year average, inventories would top out at 4.475 trillion cubic feet, 8.4% over peak capacity estimates of about 4.1 trillion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June added 0.2% to trade at USD94.97 a barrel, while heating oil for June delivery edged up 0.3% to trade at USD2.937 per gallon.
On the New York Mercantile Exchange, natural gas futures for delivery in June traded at USD2.482 per million British thermal units during U.S. morning trade, jumping 2.1%.
It earlier rose by as much as 2.5% to trade at a session high of USD2.497 per million British thermal units. Prices touched USD2.530 on May 11, the highest since March 1.
Gas prices regained strength after the National Weather Service's six- to 10-day outlook issued on Monday called for above-normal readings for most parts of the U.S.
Warmer-than-normal temperatures increase the need for gas-fired electricity to to power air conditioning, boosting demand for natural gas. Natural gas accounts for about a quarter of U.S. electricity generation.
Sentiment on the fuel has improved in recent weeks, after hitting a string of fresh 10-year lows for the most part of April.
Prices are up almost 25% since hitting a decade-low of USD1.902 on April 19, amid indications major North American natural gas producers were cutting back on production.
Speculation that utility providers in the U.S. were switching from pricier coal to cheaper natural gas provided further support over recent sessions.
However, prices could experience a near-term downside correction as traders remained concerned over elevated U.S. storage levels.
The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 30 billion cubic feet to 2.606 trillion cubic feet last week, up 44.2% from year ago levels and 44.5% higher than the five-year average.
Early injection estimates for this week’s storage data range from 52 billion cubic feet to 79 billion cubic feet, compared to last year's build of 86 billion cubic feet. The five-year average change for the week is an increase of 91 billion cubic feet.
If weekly stock builds through October match the five-year average, inventories would top out at 4.475 trillion cubic feet, 8.4% over peak capacity estimates of about 4.1 trillion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in June added 0.2% to trade at USD94.97 a barrel, while heating oil for June delivery edged up 0.3% to trade at USD2.937 per gallon.