Natural Gas Futures Extend Gains to Reach 8-Month High

Investing.com – Natural gas futures continued higher for the second day in a row on Tuesday, reaching their strongest level in around eight months as forecasts for frigid temperatures across the U.S. east coast during early February boosted demand expectations.

Front-month surged 9.3 cents, or around 2.9%, to $3.317 per million British thermal units (btu) by 8:20AM ET (1320GMT), after touching its best level since May 25 at $3.334 at one point.

U.S. gas futures on Monday amid forecasts for more heating demand through early February.

Mild conditions will dominate the southern and eastern U.S. through Feb. 3rd, then become much colder as frigid Arctic air pours into the region, according to updated weather models.

Temperatures throughout the central U.S. and Midwest will also fall to below seasonal levels through Feb. 6 as Arctic blasts sweep through.

Natural gas prices typically rise during the winter months as colder weather sparks indoor-heating demand. The heating season from November through March is the peak demand period for U.S. gas consumption.

Meanwhile, market participants looked ahead to this week’s due on Thursday, which is expected to show a draw in a range between 260 and 275 billion cubic feet (bcf) in the week ended Jan. 19.

That compares with a decline of 183 bcf in the preceding week, a fall of 119 bcf a year earlier and a five-year average drop of 164 bcf.

Total natural gas in storage currently stands at 2.584 trillion cubic feet (tcf), according to the U.S. Energy Information Administration. That figure is 368 bcf, or around 12.5%, lower than levels at this time a year ago and 362 bcf, or roughly 12.3%, below the five-year average for this time of year.

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