Investing.com - U.S. natural gas prices rose to a four-week high on Tuesday, as forecasts for warmer-than-average temperatures across much of the U.S. boosted summer cooling demand for the fuel.
Natural gas for delivery in August hit a session peak of $2.933 per million British thermal units on the New York Mercantile Exchange, the most since June 17, before trading at $2.894 during U.S. morning hours, up 3.0 cents, or 1.06%.
A day earlier, natural gas surged 9.4 cents, or 3.39%, to close at $2.864. Futures were likely to find support at $2.787, the low from July 13, and resistance at $2.976, the high from June 17.
Updated weather forecasting models pointed to warmer-than-normal temperatures across many regions through July 24. Forecasts originally called for mild summer weather during the period.
Hotter-than-normal summer temperatures increase the need for gas-fired electricity to cool homes, boosting demand for natural gas. Natural gas accounts for about a quarter of U.S. electricity generation.
The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 91 billion cubic feet, compared to expectations for an increase of 86 billion and following a build of 69 billion cubic feet in the preceding week.
Total U.S. natural gas storage stood at 2.668 trillion cubic feet as of last week, 32.8% higher than during the same week a year earlier and 1.7% above the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have made up for all of last winter’s unusually strong demand.
The EIA's next storage report slated for release on Thursday, July 16 is expected to show a build of approximately 95 billion cubic feet for the week ending July 10.
Supplies rose by 105 billion cubic feet in the same week last year, while the five-year average change is an increase of 71 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in August shed 85 cents, or 1.61%, to trade at $51.89 a barrel, while heating oil for August delivery tumbled 1.93% to trade at $1.706 per gallon.