Investing.com - U.S. natural gas prices bounced back from the previous session's losses on Tuesday, as market players continued to assess the outlook for U.S. demand and supply levels.
Natural gas for delivery in August on the New York Mercantile Exchange tacked on 4.1 cents, or 1.43%, to trade at $2.864 per million British thermal units during U.S. morning hours.
A day earlier, natural gas lost 4.7 cents, or 1.64%, to close at $2.823 as near-term weather forecasts turned milder, dampening demand expectations for the cooling fuel.
Futures were likely to find support at $2.776, the low from July 17, and resistance at $2.944, the high from July 17.
Updated weather forecasting models continued to call for higher-than-normal temperatures across most parts of the U.S. in the first half of the week, before a shift to cooler weather pushes readings to near normal across much of Northeast and Midwest late in the week.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.
According to the U.S. Energy Information Administration, natural gas storage in the U.S. rose by 99 billion cubic feet last week, compared to expectations for an increase of 95 billion and following a build of 91 billion cubic feet in the preceding week.
Supplies rose by 105 billion cubic feet in the same week last year, while the five-year average change is an increase of 71 billion cubic feet.
Total U.S. natural gas storage stood at 2.767 trillion cubic feet, 30.9% higher than during the same week a year earlier and 2.7% above the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have made up for all of last winter’s unusually strong demand.
The EIA's next storage report slated for release on Thursday, July 23 is expected to show a build of approximately 71 billion cubic feet for the week ending July 17.
Supplies rose by 92 billion cubic feet in the same week last year, while the five-year average change is an increase of 53 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in September inched up 12 cents, or 0.25%, to trade at $50.55 a barrel, while heating oil for August delivery advanced 0.19% to trade at $1.661 per gallon.