Investing.com - Natural gas futures shot up on Monday after a blast of cold air shot across the U.S. and fueled expectations for demand for heating to rise.
On the New York Mercantile Exchange, natural gas futures for delivery in December were up 5.96% at $4.260 per million British thermal units during U.S. trading. The commodity hit a session low of $4.114, and a high of $4.291.
The December contract settled up 1.08% on Friday to end at $4.020 per million British thermal units.
Natural gas futures were likely to find support at $3.931 per million British thermal units, Friday's low, and resistance at $4.544, last Monday's high.
Temperatures across the central and eastern U.S. were plunging Monday, which sent natural gas prices soaring on expectations for households and business to crank up their heating and send thermal power plants to burn more of the commodity to meet demand.
Updated weather forecasting models showed slightly more cold over the next two weeks in the lower 48 states, while the Midwest and East Coast could see below-normal temperatures at the beginning of December, which added to Monday's rally.
Bullish speculators are betting on the chilly weather to increase early-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, investors continued to digest last week's inventory data, which showed that natural gas storage in the U.S. rose by 40 billion cubic feet, above expectations for an increase of 39 billion.
Inventories rose by 22 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 16 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 30 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 3.611 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 6.2% from a record 54.7% at the end of March.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January were down 0.08% at $75.76 a barrel, while heating oil for December delivery were down 0.39% at $2.4069 per gallon.