Investing.com - Natural gas futures surged nearly 5% during U.S. afternoon trade Tuesday, as forecasts indicating colder-than-normal temperatures across most parts of the U.S. in the coming week boosted near-term demand expectations for the heating fuel.
Market players also looked ahead to a closely watched U.S. government report on natural gas supplies on Thursday, amid speculation the data could show the first withdrawal of the winter heating season.
On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.744 per million British thermal units during U.S. morning trade, rallying 4.83%.
Updated weather forecasts released earlier showed that cold weather was expected in most parts of the U.S. Southeast during the next five days.
Meanwhile, the Commodity Weather Group said earlier that temperatures may be colder-than-normal across most of the eastern half of the U.S. through November 17.
Bullish speculators are betting on the colder weather increasing early-winter demand for the heating fuel.
Natural gas prices drew additional support from expectations this Thursday’s storage data will show the first withdrawal of the U.S. heating season, in what would be the earliest seasonal decline since 2007.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Early injection estimates range from a build of 15 billion cubic feet to a draw of 17 billion cubic feet, compared to last year's build of 20 billion cubic feet. The five-year average change for the week is an increase of 17 billion cubic feet.
Total U.S. gas supplies stood at 3.929 trillion cubic feet, an all-time record that surpasses the previous peak of 3.852 trillion cubic feet reached last November.
Stocks are 2.9% above a year ago and 6.6% above the five-year average for the week.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January shed 0.25% to trade at USD85.88 a barrel, while heating oil for December delivery fell 1.1% to trade at USD2.966 per gallon.