Investing.com - U.S. natural gas prices rose on Tuesday, one day after falling to the lowest level in almost three months, as market players continued to assess the outlook for U.S. demand and supply levels.
Natural gas for delivery in October on the New York Mercantile Exchange tacked on 2.5 cents, or 0.92%, to trade at $2.681 per million British thermal units during U.S. morning hours.
A day earlier, natural gas prices fell to $2.641, the weakest level since June 8, before ending at $2.656, down 4.1 cents, or 1.52%.
Updated weather forecasting models released Tuesday showed that most parts of the southern and western U.S. will be engulfed by hot temperatures.
However, cooler weather was expected across most parts of the Great Lakes, Northeast and Midwest-regions as the week progresses.
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 stood at 3.030 trillion cubic feet as of last week, 19.2% 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.
Data last week showed that natural gas storage in the U.S. rose by 53 billion cubic feet, below expectations for an increase of 58 billion.
That compared with builds of 65 billion cubic feet in the prior week, 86 billion cubic feet in the same week last year, while the five-year average change for the week was an increase of 54 billion cubic feet.
The EIA's next storage report slated for release on Thursday, August 27 is expected to show a build of approximately 60 billion cubic feet for the week ending August 21.
Supplies rose by 77 billion cubic feet in the same week last year, while the five-year average change is an increase of 61 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in October rallied $1.20, or 3.14%, to trade at $39.44 a barrel, while heating oil for September delivery jumped 1.98% to trade at $1.421 per gallon.