Natural Gas Futures Climb To Highest Level In Four Weeks

Investing.com – Natural gas futures climbed to their highest level in around four weeks on Tuesday, boosted by forecasts for a bump in late-winter heating demand.

Front-month tacked on 2.4 cents, or around 0.9%, to $2.728 per million British thermal units (btu) by 8:20AM ET (1320GMT). It rose to its best level since Feb. 7 at $2.735 earlier in the session.

The commodity notched a small gain of around 0.3% on Monday, as updated weather forecasting models showed colder weather lingering over the eastern U.S. through mid-March.

Despite recent gains, market experts warned that futures are likely to remain vulnerable in the near-term as the coldest part of the winter has effectively passed.

Natural gas prices are down nearly 25% since late January amid speculation the end of the winter heating season will bring warmer temperatures throughout the U.S. and cut into demand for the fuel.

Spring usually sees the weakest demand for natural gas in the U.S, as the absence of extreme temperatures curbs demand for heating and air conditioning.

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 storage data due on Thursday, which is expected to show a draw in a range between 54 and 68 billion cubic feet (bcf) in the week ended March 2.

That compares with a decline of 78 bcf in the preceding week, a drop of 68 bcf a year earlier and a five-year average fall of 129 bcf.

Total natural gas in storage currently stands at 1.682 trillion cubic feet (tcf), according to the U.S. Energy Information Administration.

That figure is 680 bcf, or around 28.8%, lower than levels at this time a year ago, and 372 bcf, or roughly 18.1%, below the five-year average for this time of year.

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