Forexpros – Natural gas futures rose sharply on Tuesday, recouping some of the previous day’s steep decline as markets cheered signs that winter’s peak heating season was approaching.
On the New York Mercantile Exchange, natural gas futures for January delivery traded at USD3.615 per million British thermal units during U.S. morning trade, jumping 2.57%.
It earlier rose by as much as 2.8% to trade at a daily high of USD3.620 per million British thermal units.
The recent bout of mild U.S. weather, which has kept prices depressed near 13-month lows in recent sessions, was beginning to give way to cooler temperatures across most parts of the U.S.
The Commodity Weather Group said earlier that temperatures in the U.S. Northeast were expected to cool to more seasonal weather during the first week of December. Temperatures in the Northeast have been higher-than-normal through the past week.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late October and early November on heating demand.
Meanwhile, markets were looking forward to the U.S. Energy Information Administration’s weekly report on U.S. natural gas stockpiles for the week ended November 25 on Thursday.
Early injection estimates range from 5 billion cubic feet to 31 billion cubic feet. The five-year average stockpile change for the week is a decline of 29 billion cubic feet, according to U.S. Energy Department data.
U.S. natural gas stockpiles stood at 3.852 trillion cubic feet as of last week, just shy of the all-time high of 3.867 hit in early November.
On Monday, natural gas prices plunged by nearly 5% as investors readjusted positions ahead of the expiration of the December natural gas contract. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in January jumped 1.3% to trade at USD99.50 a barrel, while heating oil for January delivery rose 1.35% to trade at USD3.022 per gallon.
Forexpros
