Investing.com - Natural gas futures shot up on Wednesday after updated weather-forecasting models called for blast of cold air to trek across parts of the U.S. at the end of December.
On the New York Mercantile Exchange, natural gas futures for delivery in January were up 2.50% at $3.710 per million British thermal units during U.S. trading. The commodity hit a session low of $3.616, and a high of $3.724.
The January contract settled down 2.69% on Tuesday to end at $3.619 per million British thermal units.
Natural gas futures were likely to find support at $3.605per million British thermal units, Tuesday's low, and resistance at $3.936, Monday's high.
Mild temperatures are hovering over a good portion of the U.S. but changes may be in store as the end of the year approaches, which could drive demand for heating.
"The transition to much colder weather patterns is still expected to take place early next week as Canadian weather systems begin arriving over the northern U.S. We still believe there are two important periods to watch, with the first being how strong a Christmas Eve storm becomes as it rolls across the Midwest and Northeast, which has trended slightly stronger recently," Natgasweather.com reported in its Wednesday midday update.
"The other period of interest will be what happens immediately after the Christmas Holiday as another weather system has greater success bringing very cold temperatures into the U.S., which are likely to last into the New Year."
Investors were also looking ahead to the weekly inventory report from the Energy Information Administration as they continued to digest last Thursday’s bullish report.
Natural gas storage fell by 51 billion cubic feet in the week ended December 5, more than expectations for a decline of 45 billion.
Total U.S. natural gas storage stood at 3.359 trillion cubic feet. Stocks were 186 billion cubic feet less than last year at this time and 351 billion cubic feet below the five-year average of 3.710 trillion cubic feet for this time of year.
Approximately 49% of U.S. households use gas for heating, according to the EIA, the statistical arm of the Energy Department.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were up 3.67% at $58.33 a barrel, while heating oil for January delivery were up 3.87% at $2.0359 per gallon.