U.S. natural gas futures jump 4% as forecasts turn warmer
Investing.com
Published May 31, 2016 09:34AM ET
U.S. natural gas futures jump 4%
Investing.com - U.S. natural gas futures rallied sharply on Tuesday, as forecasts for the coming week turned warmer, boosting near-term demand expectations for the heating fuel. Forecasts originally called for mild summer weather during the period.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early summer cooling 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.
Natural gas for delivery in July on the New York Mercantile Exchange soared 9.1 cents, or 4.2%, to trade at $2.260 per million British thermal units by 13:32GMT, or 9:32AM ET.
Gains were expected to remain limited amid ongoing concerns over record-high storage levels. Total U.S. natural gas storage stood at 2.8 trillion cubic feet as of last week, according to the U.S. Energy Information Administration, 37% higher than levels at this time a year ago and above the five-year average for this time of year.
Unless intense summer heat boosts demand from power plants, stockpiles will test physical storage limits of 4.3 trillion cubic feet at the end of October.
Natural gas prices are down nearly 15% so far this year as weak winter heating demand, near-record production and record-high storage levels dragged down prices.
Elsewhere on the Nymex, crude oil for delivery in July inched up 22 cents, or 0.45%, to trade at $49.55 a barrel, while heating oil for July delivery tacked on 0.55% to trade at $1.509 per gallon.
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Written By: Investing.com
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