Investing.com - U.S. natural gas futures rose to a new eight-week high on Tuesday, as traders continued to eye potential storm activity in the Gulf of Mexico.
According to the U.S. Bureau of Safety and Environmental Enforcement, gas operators in the U.S. Gulf of Mexico have shut production equal to about 190 million cubic feet per day of natural gas as a precaution against a tropical storm, it said on Monday.
Natural gas for delivery in October on the New York Mercantile Exchange touched an intraday peak of $2.943 per million British thermal units, the most since July 5.
It was last at $2.897 by 10:25AM ET (14:25GMT), little changed on the day.
Meanwhile, forecasts for warmer than normal temperatures across most parts of the continental U.S. in the days ahead provided further support.
Updated weather forecasting models pointed to very warm late summer temperatures into mid-September, boosting demand expectations for the cooling fuel.
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.
U.S. storage levels also remained in focus. Market players looked ahead to weekly supply data due on Thursday, which is expected to show a build of approximately 25 billion cubic feet.
That compares with a gain of 11 billion cubic feet in the preceding week, 96 billion a year earlier and a five-year average of 67 billion cubic feet.
Total gas in storage currently stands at 3.350 trillion cubic feet, according to the U.S. Energy Information Administration, 8.3% higher than levels at this time a year ago and 8.2% above the five-year average for this time of year.
Some market analysts said persistent heat late into the season could push power generators to continue burning gas.
Unless intense late-summer heat boosts demand from power plants, stockpiles could possibly test physical storage limits of 4.3 trillion cubic feet at the end of October.