Investing.com - U.S. natural gas prices rose for the third consecutive session on Wednesday, as market participants looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.
Natural gas for delivery in September on the New York Mercantile Exchange rose 3.5 cents, or 1.23%, to trade at $2.851 per million British thermal units during U.S. morning hours after hitting a daily peak of $2.865, the most since July 23.
A day earlier, natural gas tacked on 2.8 cents, or 1.0%, to end at $2.816 as investors bet a heat wave making its way across the eastern U.S. will prompt households to ramp up their air conditioning.
Updated weather forecasting models called for hotter than normal temperatures across most parts of the Midwest and East Coast over the next five days.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning. Natural gas accounts for about a quarter of U.S. electricity generation.
The U.S. Energy Information Administration's storage report due on Thursday is expected to show a build of approximately 55 billion cubic feet for the week ending July 24, compared to an increase of 68 billion cubic feet in the preceding week.
Supplies rose by 88 billion cubic feet in the same week last year, while the five-year average change is an increase of 48 billion cubic feet.
Total U.S. natural gas storage stood at 2.828 trillion cubic feet as of last week, 28.2% higher than during the same week a year earlier and 2.9% 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.
Elsewhere on the Nymex, crude oil for delivery in September shed 32 cents, or 0.67%, to trade at $47.66 a barrel, while heating oil for August delivery inched down 0.14% to trade at $1.602 per gallon.