Investing.com - U.S. natural gas futures bounced back from the prior session's losses on Tuesday, as investors bet a heat wave making its way across the continental U.S. will prompt households to ramp up their air conditioning.
Updated weather forecasting models showed that temperatures are expected to be warmer than previously projected in the central U.S. from July 20 to July 24, and sweltering conditions are also forecast for the West from July 25 to July 29.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning.
Natural gas for delivery in August on the New York Mercantile Exchange rose 3.7 cents, or 1.36%, to trade at $2.759 per million British thermal units by 14:35GMT, or 10:35AM ET.
A day earlier, natural gas lost 3.4 cents, or 1.23%, amid speculation that July heat won’t prevent stockpiles from reaching a record before the winter.
Total U.S. natural gas storage stood at 3.243 trillion cubic feet as of last week, according to the U.S. Energy Information Administration, 15.6% higher than levels at this time a year ago and 18.1% above the five-year average for this time of year.
Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.
This week's storage report slated for release on Thursday is expected to show a build in a range between 32 billion to 44 billion cubic feet for the week ending July 15.
That compares with an increase of 64 billion cubic feet in the prior week, 59 billion a year earlier and a five-year average of 61 billion cubic feet.