Investing.com - Natural gas futures rallied more than 2% on Tuesday, as forecasts predicting snow across many densely populated areas in the U.S. Northeast boosted near-term heating demand expectations.
On the New York Mercantile Exchange, natural gas futures for delivery in May rose to a session high of $4.394 per million British thermal units, the strongest level since March 20.
Nymex natural gas prices last traded at $4.379 per million British thermal units during U.S. morning hours, up 2.49, or 10.6 cents.
The May contract lost 0.58%, or 2.5 cent, on Monday to settle at $4.272 per million British thermal units.
Futures were likely to find support at $4.256 per million British thermal units, the low from March 24 and resistance at $4.447, the high from March 20.
The U.S. National Weather Service predicted a powerful storm could form over the Atlantic and slam in to the Northeast coast late on Tuesday. Blizzard warnings are in effect across the area, with up to six inches of snow expected in some places.
The unseasonably cold weather was likely to boost near-term heating demand.
Total U.S. natural gas storage stood at 953 billion cubic feet as of last week, the lowest for this time of year since 2003, following a smaller than expected withdrawal of 48 billion cubic feet.
Early withdrawal estimates for this Thursday’s storage data range from a decline of 36 billion cubic feet to 76 billion cubic feet, compared to a drop of 90 billion cubic feet during the same week a year earlier.
The five-year average change for the week is a decline of 7 billion cubic feet.
Natural gas prices have been under heavy selling pressure in recent sessions amid concerns that the arrival of spring will bring warmer temperatures throughout the U.S. and cut into demand for heating.
The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in May was flat to trade at $99.45 a barrel, while heating oil for May delivery dipped 0.1% to trade at $2.910 per gallon.