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Natural gas post strong gains on warmer weather forecasts

Published 08/19/2014, 01:00 PM
Updated 08/19/2014, 01:01 PM
Natural gas climbs as U.S. weather forecasts heat up

Investing.com - Forecasts for rising temperatures across the U.S. Midwest sent natural gas prices rising on Tuesday.

On the New York Mercantile Exchange, natural gas futures for delivery in September traded at $3.897 per million British thermal units during U.S. trading, up 2.76%. The commodity hit a session low of $3.781, and a high of $3.915.

The September contract settled up 0.42% on Monday to end at $3.792 per million British thermal units.

Natural gas futures were likely to find support at $3.727 per million British thermal units, Monday's low, and resistance at $4.020, last Tuesday's high.

Mild temperatures hovering over the Midwest are giving way to warmer temperatures typical of this time of year, which sent natural gas price rising on sentiments thermal power plants will burn more of the commodity to meet demand for air conditioning.

Parts of the eastern U.S. will also see rising mercury readings in the coming days as well, which added to Tuesday's rally.

U.S. supply data remained in focus.

The U.S. Energy Information Administration's next storage report is slated for release on Thursday, Aug. 21, with analysts expecting a build of 82 billion cubic feet for the week ending Aug. 15.

The EIA said in its last weekly report that natural gas storage in the U.S. in the week ending Aug. 8 rose by 78 billion cubic feet, below expectations for an increase of 83 billion cubic feet.

Inventories rose by 70 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 45 billion cubic feet.

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Injections of gas into storage have surpassed the five-year average for 17 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 2.467 trillion cubic feet. Stocks were 530 billion cubic feet less than last year at this time and 575 billion cubic feet below the five-year average of 3.042 trillion cubic feet for this time of year.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were down 0.69% at $93.10 a barrel, while heating oil for September delivery were up 0.28% at $2.8138 per gallon.

Latest comments

Yesterday Investing news has a clip that said parts of the eastern U.S. will also see rising mercury readings in the coming days as well, which added to Tuesday's rally. The news this morning said that New York and Boston i.e. the North East will see unseasonably lower temperatures by the end of the week. What gives?
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