Natural gas prices extended Monday’s gains into Tuesday after weather forecasting models continued to point to above-normal temperatures settling in for much of the country over the next week.
In the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD3.884 per million British thermal units, up 0.22%.
The commodity hit a session low of USD3.866 and a high of USD3.952.
The National Weather Service’s six-to-ten-day outlook issued on Sunday called for above-normal readings for a good portion of the U.S.
Elsewhere, the Commodity Weather Group LLC predicted hot weather to settle in for the northern U.S. from June 23 to June 27.
Hotter temperatures send prices rising on sentiments that demand for natural gas will increase at the country’s thermal power plants as businesses and households crank up their air conditioning.
Natural gas accounts for about a quarter of U.S. electricity generation.
Meanwhile, traders kept an eye out towards U.S. supply levels due for release on Thursday.
Total U.S. natural gas storage stood 2.347 trillion cubic feet as of last week, 2% below the five-year average for this time of year.
Early injection estimates for this week’s storage data range from 83 billion cubic feet to 95 billion cubic feet, compared to a 63 billion cubic feet increase during the same week a year earlier.
The five-year average for the week is a build of 80 billion cubic feet.
Elsewhere, a tropical depression that formed in the Caribbean on Monday made landfall on the coast of Belize.
Investors paid close attention to the system to see if it emerges in the gas-rich Gulf of Mexico in the coming days and strengthens.
Tropical weather systems often disrupt production in the Gulf of Mexico and send prices rising.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in August were up 0.44% and trading at USD98.47 a barrel, while heating oil futures for July delivery were up 0.39% at USD2.9619 per gallon.