Forexpros – Natural gas futures traded higher Tuesday, as forecasts for hotter-than-normal temperatures across the U.S. continued to provide support for gas-powered electricity demand.
On the New York Mercantile Exchange, natural gas futures for delivery in September traded at USD3.224 per million British thermal units during U.S. afternoon trade, higher by 0.30%.
Earlier in the session, natural gas futures fell to a low of USD3.050 per million British thermal units, amid profit taking following Monday’s rally, before recovering those losses.
Warmer-than-normal temperatures increase the need for gas-fired electricity to power air conditioning, boosting demand for natural gas. Natural gas accounts for about a quarter of U.S. electricity generation.
A bout of hot weather across much of the U.S. over the past several weeks has prompted power generators to burn more of the fuel to meet demand, easing a storage glut and lending support to prices.
Total natural gas inventories are now approximately 15% above the five-year average for this week.
Stockpiles increased to 60% above the five-year average earlier this year after a mild winter cut demand for natural gas to heat homes and businesses, sparking fears that supplies would exceed available storage capacity by the end of the year.
Natural gas traders were looking ahead to the Energy Information Administration’s monthly gross natural gas production report due later in the day, looking for signs that record- or near-record-high output was finally slowing.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in September tumbled 2.65% to USD87.40 a barrel.
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