Investing.com - U.S. natural gas futures dipped on Tuesday, but held near the prior session’s five-month high as forecasts for continued above-normal temperatures across most parts of the U.S. over the next two weeks provided support.
Natural gas for delivery in July on the New York Mercantile Exchange shed 1.5 cents, or 0.61%, to trade at $2.451 per million British thermal units by 14:38GMT, or 10:38AM ET.
A day earlier, natural gas futures rallied to $2.480, the most since January 11, as warmer weather lifted cooling demand prospects for the fuel.
Strong upper level high pressure will dominate much of the U.S. through June 21, with temperatures reaching the upper 80s to 100 Fahrenheit.
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 prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early summer cooling demand.
Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning.
Meanwhile, traders looked ahead to fresh weekly information on U.S. gas inventories to gauge the strength of demand for the fuel.
The U.S. Energy Information Administration's storage report slated for release on Thursday is expected to show a build of approximately 77 billion cubic feet for the week ending June 3.
That compared with builds of 82 billion cubic feet in the prior week, 117 billion a year earlier and a five-year average of 96 billion cubic feet.
Total U.S. natural gas storage stood at 2.907 trillion cubic feet as of last week, according to the U.S. Energy Information Administration, 24.5% higher than levels at this time a year ago and 25.9% above the five-year average for this time of year.
Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.
Elsewhere on the Nymex, crude oil for delivery in July tacked on 39 cents, or 0.78%, to trade at $50.08 a barrel, while heating oil for July delivery increased 1.6% to trade at $1.527 per gallon.