Investing.com – Natural gas futures pared gains on Tuesday, easing off a one-month high as some mild profit taking emerged and as traders looked past the heat wave that has supported demand for the fuel in the past week.
On the New York Mercantile Exchange, natural gas futures for August delivery traded at USD4.545 per million British thermal units during U.S. morning trade, edging 0.33% higher.
Earlier in the day, natural gas prices rose as much as 1.1% to trade at a daily high of USD4.579 per million British thermal units after the U.S. National Weather Service said on Monday that weather patterns indicated a "massive" heat wave would develop over the central U.S. states in the coming week.
According to the weather group, temperatures in parts of Iowa and Illinois were forecast to reach as high as 105 Fahrenheit (41 Celsius) on July 25.
However, the rally prompted some investors to sell their position on profit taking and lock in gains on speculation that the market’s recent rally had accounted for the boost to cooling needs.
Industry weather group MDA Federal said earlier that it expected seasonally normal temperatures to return to the U.S. Midwest and Eastern states towards the end of July and early August.
Meanwhile, concerns over rising production levels weighed on prices.
Industry research group Baker Hughes said on Friday that the number of active rigs drilling for natural gas in the U.S. last week rose to 885 from 873, the highest amount in six weeks and the third gain in four weeks.
Natural gas traders closely watch the rig count to gauge supply growth. The rig count has dropped sharply from a recent peak of 992 last August, but the current level of activity is still widely expected to lead to further production gains.
Many analysts believe the gas-rig count must decline to close to 800 to balance production with demand.
Elsewhere, light sweet crude oil futures for delivery in September jumped 2.2% to trade at USD98.47 a barrel, while heating oil for August delivery rose 1.35% to trade at USD3.121 per gallon during U.S. morning trade.
On the New York Mercantile Exchange, natural gas futures for August delivery traded at USD4.545 per million British thermal units during U.S. morning trade, edging 0.33% higher.
Earlier in the day, natural gas prices rose as much as 1.1% to trade at a daily high of USD4.579 per million British thermal units after the U.S. National Weather Service said on Monday that weather patterns indicated a "massive" heat wave would develop over the central U.S. states in the coming week.
According to the weather group, temperatures in parts of Iowa and Illinois were forecast to reach as high as 105 Fahrenheit (41 Celsius) on July 25.
However, the rally prompted some investors to sell their position on profit taking and lock in gains on speculation that the market’s recent rally had accounted for the boost to cooling needs.
Industry weather group MDA Federal said earlier that it expected seasonally normal temperatures to return to the U.S. Midwest and Eastern states towards the end of July and early August.
Meanwhile, concerns over rising production levels weighed on prices.
Industry research group Baker Hughes said on Friday that the number of active rigs drilling for natural gas in the U.S. last week rose to 885 from 873, the highest amount in six weeks and the third gain in four weeks.
Natural gas traders closely watch the rig count to gauge supply growth. The rig count has dropped sharply from a recent peak of 992 last August, but the current level of activity is still widely expected to lead to further production gains.
Many analysts believe the gas-rig count must decline to close to 800 to balance production with demand.
Elsewhere, light sweet crude oil futures for delivery in September jumped 2.2% to trade at USD98.47 a barrel, while heating oil for August delivery rose 1.35% to trade at USD3.121 per gallon during U.S. morning trade.