Investing.com - Natural gas prices rose on Thursday after forecasts for falling U.S. temperatures offset a bearish supply report, with expectations building for heating demand to rise in the coming days.
On the New York Mercantile Exchange, natural gas futures for delivery in December were up 1.03% at $3.827 per million British thermal units during U.S. trading. The commodity hit a session low of $3.771, and a high of $3.834.
The December contract settled up 1.53% on Wednesday to end at $3.788 per million British thermal units.
Natural gas futures were likely to find support at $3.620 per million British thermal units, Tuesday's low, and resistance at $3.955, the high from Oct. 14.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending Oct. 24 rose by 87 billion cubic feet, above expectations for an increase of 85 billion and compared to a gain of 94 billion in the previous week.
Inventories rose by 45 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 59 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 28 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 3.480 trillion cubic feet. Stocks were 294 billion cubic feet less than last year at this time and 310 billion cubic feet below the five-year average of 3.790 trillion cubic feet for this time of year.
Elsewhere, updated weather-forecasting models predicted cold Canadian air to make its way south in the lower 48 states in the coming days, potentially driving demand for heating.
Warmer air will make its return afterwards and possibly drive demand for air conditioning, though forecasts for reinforcing blasts of cold air supported natural gas prices.
"A fairly chilly weather system is still on tap this weekend for the eastern U.S., where temperatures will drop 10-20F cooler than normal, including deep into the Southeast where lows will drop into the mid 30s," Natgasweather.com reported in its midday Thursday update.
"The southern and eastern U.S. will warm nicely early next week as high pressure rapidly follows in the wake of the departing weekend weather system. The next weather system that has potential to bring widespread near or sub-freezing temperatures to the Midwest and Northeast will arrive late next week."
The heating season from November through March is the peak demand period for U.S. gas consumption.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were down 0.96% at $81.41 a barrel, while heating oil for December delivery were down 0.32% at $2.5155 per gallon.