Investing.com - U.S. natural gas prices rose to a three-week high on Wednesday, as forecasts for later this month turned warmer, boosting near-term demand expectations for the heating fuel.
Natural gas for delivery in September on the New York Mercantile Exchange hit an intraday peak of $2.897 per million British thermal units, the most since July 23, before trading at $2.893 during U.S. morning hours, up 4.9 cents, or 1.71%.
A day earlier, natural gas prices tacked on 0.2 cents, or 0.07%, to close at $2.844 as forecasts for mild weather across the U.S. northeast weighed on demand expectations for the fuel.
Updated weather forecasting models pointed to warmer-than-normal temperatures across many regions, including the east, central and southern U.S., after August 20 and until the end of the month, boosting late-summer cooling demand for the fuel.
Forecasts originally called for mostly average summer temperatures during the period.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.
Meanwhile, market participants 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 next storage report slated for release on Thursday, August 13 is expected to show a build of approximately 50 billion cubic feet for the week ending August 7.
That compared with builds of 32 billion cubic feet in the prior week, 79 billion cubic feet in the same week last year, while the five-year average change for the week is an increase of 48 billion cubic feet.
Natural gas storage stood at 2.912 trillion cubic feet as of last week, 22.5% higher than during the same week a year earlier and 2.2% 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 tumbled $1.69, or 3.76%, to trade at $43.27 a barrel, while heating oil for September delivery sank 2.47% to trade at $1.552 per gallon.