Natural gas futures jump 2% with supplies in focus

Investing.com - Natural gas futures rallied on Tuesday, amid speculation weekly supply data due later in the week will show a larger-than-average drop in U.S. natural gas inventories.

On the New York Mercantile Exchange, natural gas futures for delivery in April rose to a session high of $4.647 per million British thermal units.

Nymex gas prices last traded at $4.603 per million British thermal units during U.S. morning hours, up 2.5%, or 11.1 cents.

The April contract plunged 2.54%, or 11.7 cents, on Monday to settle at $4.492 per million British thermal units.

Futures were likely to find support at $4.441 per million British thermal units, the low from February 27 and resistance at $4.736, the high from March 3.

Early withdrawal estimates for this Thursday’s storage data ranged from 140 billion cubic feet to 174 billion cubic feet, which is mostly above the year-ago draw of 149 billion cubic feet and well above the five-year average draw of 105 billion.

Total U.S. natural gas storage stood at 1.348 trillion cubic feet as of last week, the lowest for this time of year since 2004, following a withdrawal of 95 billion cubic feet.

Natural gas prices rallied to a more than five-year high of $6.493 per million British thermal units on February 20 as unusually cold winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Elsewhere on the Nymex, light sweet crude oil futures for delivery in April dropped 1.35% to trade at $103.49 a barrel, while heating oil for April delivery slumped 1.6% to trade at $3.031 per gallon.