U.S. natural gas futures rose to a more than one-week high on Tuesday, extending gains from the prior session amid bullish weather forecasts that should provide a boost in demand for the fuel.
U.S. natural gas for August delivery was at $3.058 per million British thermal units by 9:25 AM ET (1325 GMT), up 0.9 cents, or around 0.3%. It rose to its highest since June 16 at $3.080 in overnight trade.
Natural gas rallied almost 10.0 cents, or roughly 3.3%, on Monday, the biggest one-day gain since late February, as updated weather forecasting models pointed to increased summer demand in the weeks ahead.
Natural gas prices have closely tracked weather forecasts in recent weeks as traders try to gauge the impact of shifting outlooks on summer heating demand. Gas use typically hits a seasonal low with spring's mild temperatures, before warmer weather increases demand for gas-fired electricity generation to power air conditioning. Nearly 50% of all U.S. households use gas for heating.
Total natural gas in storage currently stands at 2.770 trillion cubic feet, according to the U.S. Energy Information Administration, 10.4% lower than levels at this time a year ago but 7.4% above the five-year average for this time of year.
Market participants looked ahead to weekly storage data due on Thursday, which is expected to show a build in a range between 50 and 61 billion cubic feet in the week ended June 23. That compares with a gain of 61 billion cubic feet in the preceding week, an increase of 37 billion a year earlier and a five-year average rise of 72 billion cubic feet.