Investing.com – U.S. natural gas prices edged higher on Monday, as extreme heat spread across the southern half of the U.S., boosting demand expectations for the fuel.
for delivery in September on the New York Mercantile Exchange jumped 4.3 cents, or 1.52%, to trade at $2.841 per million British thermal units during U.S. morning hours.
Updated weather forecasting models showed that most parts of the central and southern U.S. remained engulfed by hot temperatures. Very warm to hot temperatures will continue to dominate most of the central and southern parts of the country through August 15th.
Gains were limited as forecasts pointed to cooler weather across the Great Lakes, Northeast and Northwest-regions through August 20.
Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.
According to the U.S. Energy Information Administration, natural gas storage stood at 2.912 trillion cubic feet as of last week, 22.5% higher than during the same week a year earlier and 2.2% above the five-year average for this time of year.
Last spring, supplies were 55% below the five-year average, indicating producers have made up for all of last winter’s unusually strong demand.
Data last week showed that in the U.S. rose by 32 billion cubic feet, below expectations for an increase of 42 billion and following a build of 52 billion cubic feet in the preceding week.
Supplies rose by 83 billion cubic feet in the same week last year, while the five-year average change is an increase of 53 billion cubic feet.
The EIA’s next storage report slated for release on Thursday, August 13 is expected to show a build of approximately 57 billion cubic feet for the week ending August 7.
Supplies rose by 79 billion cubic feet in the same week last year, while the five-year average change is an increase of 48 billion cubic feet.
Elsewhere on the Nymex, for delivery in September shed 29 cents, or 0.66%, to trade at $43.58 a barrel, while for September delivery rose 0.99% to trade at $1.558 per gallon.
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