Natural gas makes cautious gains on forecasts for warm weather

Investing.com - Natural gas prices inched up in U.S. trading on Monday after weather forecasts called for above-normal temperatures in parts of the U.S. next week.

In the New York Mercantile Exchange, natural gas futures for delivery in July traded at USD3.993 per million British thermal units, up 0.21%.

The commodity hit a session low of USD3.952 and a high of USD4.039.

Weather forecasting models continued to point to above-normal temperatures across most of the U.S. over the next five days, though afterwards, some forecasting services pointed to below-normal temperatures later in June, which capped gains.

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 units.

Calls for below-normal temperatures across parts of the eastern U.S. can dampen prices.
Investors kept an eye on U.S. supply levels. The U.S. Energy Information Administration said last week that natural gas storage in the U.S. rose by 88 billion cubic feet.

Inventories rose by 72 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a rise of 92 billion cubic feet.

Total U.S. natural gas storage stood at 2.141 trillion cubic feet as of last week, 4% below the five-year average for this time of year.

Early injection estimates for this week’s storage data range from 78 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 92 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in July were up 1.50% and trading at USD93.35 a barrel, while heating oil futures for July delivery were up 2.13% at USD2.8407 per gallon.