Investing.com - Natural gas prices shot up on Tuesday after updated weather-forecasting models called below-normal temperatures to sweep across the northern U.S. and prompt households to crank up their heating.
On the New York Mercantile Exchange, natural gas futures for delivery in October were up 2.88% at $3.988 per million British thermal units during U.S. trading. The commodity hit a session low of $3.855, and a high of $4.016.
The October contract settled up 2.19% on Monday to end at $3.876 per million British thermal units.
Natural gas futures were likely to find support at $3.761 per million British thermal units, Monday's low, and resistance at $4.078, the high from Sept. 2.
Thermal power plants may burn more natural gas this week to meet demand from households in the northern U.S. turning on their heaters.
The southern and western U.S., meanwhile, will continue to see seasonably warm weather, which should hike demand for air conditioning, also bullish for natural gas.
A strong Canadian cold front is to due to sweep into the northern Rockies and head east in the coming days.
"This much colder-than-normal weather system will gradually sweep deep into the central and eastern U.S. through Saturday while moderating a few degrees each day. This will bring temperatures 10-20⁰F cooler than normal to many regions as lows drop into the 30s and 40s over the northern U.S.," Natgasweather.com reported in its Sept. 9-15 forecast released earlier Tuesday.
"The western U.S., including California, will be warmer than normal with highs reaching the upper 80s and 90s," Natgasweather.com added.
Meanwhile, the U.S. Energy Information Administration said in its weekly report last Thursday that natural gas storage in the U.S. rose by 79 billion cubic feet in the week prior, surpassing expectations for an increase of 73 billion cubic feet.
The five-year average change for the week is a build of 56 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 20 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 2.709 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 15.4% from 17% a week earlier and down from a record 54.7% at the end of March.
The EIA's next storage report is slated for release on Thursday, with analysts expecting a build of 79 billion cubic feet for the week ending Sept. 5.
Inventories rose by 64 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 60 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were up 0.23% at $92.87 a barrel, while heating oil for October delivery were down 0.55% at $2.7940 per gallon.