Investing.com - Natural gas futures shot up on Tuesday as a winter storm trekked across the northeastern U.S., sparking a rally due to sentiments homes and business will crank up their heating.
On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD5.446 per million British thermal units during U.S. trading, up 4.45%. The commodity hit session high of USD5.558 and a low of USD5.413.
The March contract settled down 0.17% on Friday to end at USD5.214 per million British thermal units. U.S. energy markets were closed for the Presidents Day holiday on Monday.
Natural gas futures were likely to find support at USD4.564 per million British thermal units, the low from Feb. 10, and resistance at USD5.734, the high from Feb. 5.
Updated weather forecasting models indicated that a strong winter storm was set to sweep over the northeastern U.S. on Tuesday and bring strong winds and fresh snowfall.
Frigid weather reports sent gas prices rising on sentiments demand for the commodity will climb at thermal power plants to heat the region's homes and businesses.
Nymex natural gas prices surged 8.41% last week, the first weekly gain in three weeks, as chilly winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel to heat their homes.
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.
Speculation that this week’s supply data will show a larger-than-average drawdown in supplies also lent support. Early withdrawal estimates range from 212 billion cubic feet to 240 billion cubic feet.
Total U.S. natural gas storage stood at 1.686 trillion cubic feet as of last week, the lowest for this time of year since 2004.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in April were up 1.44% and trading at USD101.58 a barrel, while heating oil for March delivery were up 0.44% and trading at USD3.0917 per gallon.