Investing.com - U.S. natural gas prices swung between gains and losses on Tuesday, as investors were hesitant to extend a recent rally which took prices to the highest level in more than five weeks amid speculation supplies are more than ample to meet demand.
On the New York Mercantile Exchange, natural gas for delivery in April shed 0.5 cents, or 0.19%, to trade at $2.888 per million British thermal units during U.S. morning hours. Prices traded in a range between $2.840 and $2.906.
A day earlier, natural gas for delivery in April rallied to $3.045, the most since January 16, before turning lower to settle at $2.893, down 7.9 cents, or 2.66%.
Futures were likely to find support at $2.811 per million British thermal units, the low from February 19, and resistance at $3.045, the high from February 23.
Prices of the heating fuel have been well supported in recent sessions as forecasts for freezing weather across large parts of the U.S. boosted expectations for much higher heating demand.
Bullish speculators are betting on the frigid weather boosting winter demand for the heating fuel.
The heating season from November through March is the peak demand period for U.S. gas consumption.
However, futures remain vulnerable to losses in the near-term amid speculation supplies are more than ample to meet demand.
Total U.S. natural gas storage stood at 2.157 trillion cubic feet as of last week, 2.8% above the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have more than made up for last winter’s unusually strong demand.
Futures are down almost 34% since mid-November as an unusually mild start to winter limited demand while production soared.
Elsewhere on the Nymex, crude oil for delivery in April inched up 20 cents, or 0.39%, to trade at $49.65 a barrel, while heating oil for April delivery dipped 0.39% to trade at $1.884 per gallon.