Natural gas futures soar more than 4% in early trade

Investing.com - U.S. natural gas prices soared 4% on Monday, as investors returned to the market after updated weather forecasting models called for colder weather over the next two weeks.

On the New York Mercantile Exchange, natural gas for delivery in December rose by as much as 4.3% to touch a session high of $4.192 per million British thermal units, the most since November 12.

Prices last traded at $4.180 during U.S. morning hours, up 16.0 cents, or 3.98%.

Futures were likely to find support at $3.931 per million British thermal units, the low from November 14, and resistance at $4.227, the high from November 12.

Updated weather forecasting models showed slightly more cold over the next two weeks in the lower 48 states.

Bullish speculators are betting on the chilly weather to increase early-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.

Nymex natural gas prices plunged 39.2 cents, or 8.88%, last week, as weather forecasting models pointed to milder temperatures across the U.S. later this month.

Meanwhile, investors continued to digest last week's inventory data, which showed that natural gas storage in the U.S. rose by 40 billion cubic feet, above expectations for an increase of 39 billion.

Inventories rose by 22 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 16 billion cubic feet.

Injections of gas into storage have surpassed the five-year average for 30 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 3.611 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 6.2% from a record 54.7% at the end of March.

Elsewhere on the Nymex, crude oil for delivery in January lost 59 cents, or 0.78%, to trade at $75.23 a barrel, while heating oil for December delivery slumped 1.02% to trade at $2.391 per gallon.