Investing.com - U.S. natural gas futures extended gains to a third session on Tuesday, hitting the strongest level since February as forecasts showing cooler weather on the way continued to boost the heating fuel.
U.S. natural gas for April delivery rallied 5.0 cents, or around 1.6% to $3.092 per million British thermal units by 8:55AM ET (12:55GMT).
It reached a daily peak of $3.099 earlier, a level not seen since February 10, after jumping almost 10 cents, or more than 3%, on Monday.
Cool temperatures will sweep across the Great Lakes and eastern U.S. toward the middle of the week, according to forecasters at NatGasWeather.com, with overnight lows expected to drop well below freezing.
Temperatures are expected to remain much colder than normal through the end of the week, with highs struggling to reach the 30s, while overnight lows drop into the teens to below 0F.
A fast-moving weather system will then impact the east-central U.S. Saturday into Sunday, followed by warming Monday, but again cooling off mid-week.
Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 150 and 160 billion cubic feet in the week ended March 17.
That compares with a withdrawal of 53 billion cubic feet in the preceding week, a build of 15 billion a year earlier and a five-year average drop of 21 billion cubic feet.
Total natural gas in storage currently stands at 2.295 trillion cubic feet, according to the U.S. Energy Information Administration, 7.7% lower than levels at this time a year ago but 15.8% above the five-year average for this time of year.
Prices of the heating fuel are down around 16% so far this year as forecasts for warm winter weather weighed on heating demand expectations.
Based on data from the National Oceanographic and Atmospheric Administration, this year’s extremely warm winter has pushed heating demand for natural gas to nearly 20% below average.
About half of U.S. homes use natural gas for heating.
Without significant demand for natural gas, inventories could stay near record levels and may even continue to pull prices even lower.