Investing.com - Natural gas prices edged lower on Tuesday after investors locked in gains from Monday's rally and sold the commodity for profits.
Prices shot up on Monday on weather forecasts calling for a return of warmer temperatures, which still provided some support on Tuesday evem as investors took profits.
On the New York Mercantile Exchange, natural gas futures for delivery in September traded at USD3.296 per million British thermal units during U.S. afternoon trading, down 0.44%.
The September contract settled up 2.48% at USD3.310 per million British thermal units on Monday.
Forecasts for above-normal temperatures to return to portions of the northern and eastern U.S. through the rest of August sent prices soaring to levels ripe for profit taking on Tuesday.
Demand for natural gas tends to rise amid heat waves, as homes and businesses throttle up their air conditioners.
Prices fell as much as 14% over the past three weeks due to unseasonably mild temperatures over the eastern U.S. and on concerns that supplies are on the rise in the U.S., which gave the commodity room to soar by well over 3% on Monday.
Elsewhere, the U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ending August 2 rose by 96 billion cubic feet, well above market expectations for an increase of 77 billion cubic feet.
Inventories rose by 25 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 42 billion cubic feet.
Total U.S. natural gas storage stood at 2.941 trillion cubic feet during the week before last.
Early injection estimates for the latest storage data range from 62 billion cubic feet to 77 billion cubic feet, compared to a 20 billion cubic feet increase during the same week a year earlier.
The five-year average for the week is a build of 42 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September were down 0.41% and trading at USD105.67 a barrel, while heating oil for September delivery were up 0.79% and trading at USD3.0448 per gallon.