Investing.com - Natural gas prices bounced back to session highs on Tuesday after markets priced in mild autumn temperatures and snapped up nicely-priced positions in the commodity, with concerns brewing that a tropical weather system could form in the western Caribbean and disrupt output.
On the New York Mercantile Exchange, natural gas futures for delivery in November were up 1.24% at $3.716 per million British thermal units during U.S. trading. The commodity hit a session low of $3.640, and a high of $3.716.
Natural gas futures were likely to find support at $3.640 per million British thermal units, the session low, and resistance at $3.955, last Tuesday's high.
Natural gas prices have tumbled in recent sessions on expectations for mild U.S. temperatures to curb demand for both heating and air conditioning.
By Tuesday, bottom fishing brought the commodity back into positive territory, as concerns began to brew that a tropical system could develop and prompt rigs in the Gulf of Mexico to evacuate.
The National Hurricane Center gave a low pressure system in the Bay of Campeche a 50% chance of developing in the next five days, though the storm was expected to steer clear oil rigs and merge with a front and race off into the Atlantic.
However, longer-range models hinted that the trough of low pressure expected to take the current system out of the Bay of Campeche and carry it northeastwards could leave in its wake another spinning area of clouds in the Western Caribbean next week, which could form into a more threatening tropical system.
Meanwhile, investors continued to digest Thursday's weekly inventory data, which showed that natural gas storage in the U.S. rose by a more than expected 94 billion cubic feet last week.
Inventories rose by 79 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 78 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 26 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 3.299 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 9.9% from a record 54.7% at the end of March.
The Energy Information Administration's next storage report is slated for release on Thursday, October 23, with analysts expecting a build in the range of 95 to 98 billion cubic feet for the week ending October 17.
The five-year average change for the week is an increase of 70 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were up 0.81% at $82.58 a barrel, while heating oil for November delivery were up 1.08% at $2.5124 per gallon.