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Natural gas rises on forecasts for cooler spring weather

Published 04/08/2014, 10:30 AM
Updated 04/08/2014, 10:30 AM
Natural gas higher on chilly spring weather forecast

Investing.com - Natural gas futures were higher on Tuesday, rising for a second session, as forecasts for cooler spring weather boosted the demand outlook.

On the New York Mercantile Exchange, natural gas futures for delivery in May traded at $4.544 per million British thermal units during U.S. trading, up 1.51%. The commodity hit session high of $4.461 and a low of $4.551.

Natural gas futures were likely to find support at $4.432 per million Btu, Monday’s low and resistance at $4.626, the high of March 12.

Weather forecasting models have indicated that colder air will continue to filter through the central U.S. and into the eastern U.S. with cooler than normal temperatures deep into the Southeast from April 12 through April 21.

Last week Nymex natural gas prices slumped 1.02%, or 4.6 cents amid concerns that the arrival of spring will bring warmer temperatures throughout the U.S. and cut into demand for heating.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.

Cooler spring weather led to speculation that natural gas stockpiles will remain close to 11-year lows for longer.

Last week’s government supply data showed that natural gas storage in the U.S. fell by 74 billion cubic feet, much more than the five-year average drop of 8 billion cubic feet for this time of year.

Total U.S. natural gas storage stood at 822 billion cubic feet, the lowest for this time of year since 2003.

Elsewhere on the NYMEX, crude oil futures for delivery in May rose 0.55% to $100.98 a barrel, while heating oil contracts for May delivery edged up 0.15% to $2.8952 per gallon.

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