Investing.com - U.S. natural gas prices rose for the first time in four sessions on Monday, as forecasts for heavy snowfall in the heavily populated Northeast region over the next two days lured the bulls back to the market.
On the New York Mercantile Exchange, natural gas for delivery in March rose by as much as 10.9 cents, or 4.05%, to hit a daily high of $2.688 per million British thermal units, before trading at $2.636 during U.S. morning hours, up 5.7 cents, or 2.19%.
On Friday, natural gas prices touched $2.567, a level not seen since June 21, 2012, before settling at $2.579, down 2.1 cents, or 0.81%.
Futures were likely to find support at $2.567 per million British thermal units, the low from February 6, and resistance at $2.698, the high from February 4.
The U.S. National Weather Service issued winter-storm warnings for central and northern New York and much of New England through Monday night.
Snowfalls could top a foot in southern New England, with as much as two feet possible in the Greater Boston area and north of the city, the weather service predicted.
New York City is expected to get a mix of freezing rain and snow with one to 2 inches of snow, forecasters said.
The U.S. Northeast is a key gas-heating area. Bullish speculators are betting on the snowy conditions boosting winter demand for the heating fuel.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Despite Monday's gains, natural gas prices remain vulnerable to further losses amid speculation supplies are more than ample to meet demand.
Total U.S. natural gas storage stood at 2.428 trillion cubic feet as of last week, 24% above year-ago levels and just 1.2% below the five-year average for this time of year.
Last spring, supplies were more than 50% below the five-year average, indicating producers have almost completely made up for last winter’s unusually strong demand.
Nymex natural gas prices lost 8.5 cents, or 4.16%, last week, capping the tenth weekly decline in the past 11 weeks. Futures are down almost 44% since mid-November as an unusually mild start to winter limited demand while production soared.
Elsewhere on the Nymex, crude oil for delivery in March tacked on 92 cents, or 1.78%, to trade at $52.61 a barrel, while heating oil for March delivery rallied 0.99% to trade at $1.857 per gallon.