Investing.com - U.S. natural gas futures rallied on Tuesday, extending a bounce off a two-week low as weather forecasts turned colder, boosting near-term demand for the heating fuel.
Natural gas for February delivery on the New York Mercantile Exchange jumped 9.1 cents, or about 2.8%, to $3.334 per million British thermal units by 8:45AM ET (13:45GMT).
The front-month contract slid to a two-week low of $3.145 on Monday, before turning higher to end up 3.9 cents, or around 1.2%, at $3.243.
Meanwhile, the more-actively traded March contract was up 8.9 cents, or 2.7%, at $3.346.
A colder system will sweep across the central and eastern U.S. later this week to finally end the current mild spell as overnight lows drop below freezing across all but the far southern U.S.
Extended models pointed to colder conditions from January 31 through February 3, maintaining near to stronger than normal natural gas demand.
Weather models initially predicted mild temperatures throughout most parts of the U.S. during the period.
Natural gas markets have been volatile in recent weeks, changing course rapidly in response to shifting outlooks in short-term weather patterns.
Prices typically rise during the winter as colder weather sparks indoor-heating demand. About half of U.S. homes use natural gas for heating.
Meanwhile, market participants looked ahead to weekly storage data due on Thursday, which is expected to show a draw in a range between 105 and 117 billion cubic feet in the week ended January 20.
That compares with a withdrawal of 243 billion cubic feet in the preceding week, 211 billion a year earlier and a five-year average drop of 176 billion cubic feet.
Total natural gas in storage currently stands at 2.917 trillion cubic feet, according to the U.S. Energy Information Administration, 12.9% lower than levels at this time a year ago and around 2.6% below the five-year average for this time of year.