Investing.com – U.S. natural gas prices extended gains from the previous session on Tuesday, as investors bet a heat wave making its way across the eastern U.S. will prompt households to ramp up their air conditioning.
for delivery in September on the New York Mercantile Exchange rose 3.3 cents, or 1.17%, to trade at $2.821 per million British thermal units during U.S. morning hours. A day earlier, natural gas tacked on 1.3 cents, or 0.47%, to end at $2.788.
Updated weather forecasting models called for hotter than normal temperatures across most parts of the Midwest and East Coast over the next five days.
Demand for natural gas tends to rise in the summer months as warmer temperatures increase the need for gas-fired electricity to power air conditioning. Natural gas accounts for about a quarter of U.S. electricity generation.
According to the U.S. Energy Information Administration, natural gas storage in the U.S. rose by 68 billion cubic feet last week. Analysts had expected an increase of 70 billion cubic feet last week.
Supplies rose by 92 billion cubic feet in the same week last year, while the five-year average change is an increase of 53 billion cubic feet.
Total U.S. natural gas storage stood at 2.828 trillion cubic feet as of last week, 28.2% higher than during the same week a year earlier and 2.9% 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.
The EIA’s next storage report slated for release on Thursday, July 30 is expected to show a build of approximately 55 billion cubic feet for the week ending July 24.
Supplies rose by 88 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 3 cents, or 0.06%, to trade at $47.36 a barrel, while for August delivery inched up 0.24% to trade at $1.599 per gallon.
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