Investing.com - U.S. natural gas futures bounced off a three-week low on Tuesday, as updated weather forecasting models pointed to seasonably cold weather through the end of January, lifting near-term demand expectations for the heating fuel.
Bullish speculators are betting on the cold weather to increase winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Natural gas for delivery in February on the New York Mercantile Exchange tacked on 3.9 cents, or 1.88%, to trade at $2.139 per million British thermal units by 13:55 GMT, or 8:55AM ET.
A day earlier, natural gas futures fell to $2.044, a level not seen since December 24, as forecasts calling for less cold weather over the next two weeks weighed.
Natural gas in storage in the U.S. fell by 168 billion cubic feet last week, according to the U.S. Energy Information Administration, below expectations for a decline of 178 billion. That compared with a drawdown of 113 billion cubic feet in the prior week, while the five-year average change for the week is a withdrawal of 178 billion cubic feet.
Total U.S. natural gas storage stood at 3.475 trillion cubic feet, 16.9% higher than levels at this time a year ago and 13.7% above the five-year average for this time of year.
The EIA's next storage report slated for release on Thursday, January 21 is expected to show a withdrawal of approximately 150 billion cubic feet for the week ending January 15.
Inventories fell 217 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 160 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in March inched up 37 cents, or 1.2%, to trade at $30.76 a barrel, while heating oil for February delivery shed 0.43% to trade at $0.9303 per gallon.