Investing.com - Natural gas futures soared to four-year highs on Wednesday amid speculation that rough winter weather has taken its toll on U.S. inventories and will reflect in Thursday''s supply report.
On the New York Mercantile Exchange, natural gas futures for delivery in March traded at $6.029 per million British thermal units during U.S. trading, up 8.61%. The commodity hit session high of $6.084 and a low of $5.561.
The March contract settled up 6.46% on Tuesday to end at $5.551 per million British thermal units.
Natural gas futures were likely to find support at $5.372 per million British thermal units, Monday''s low, and resistance at $6.108, the high from Jan. 7, 2010.
A string of winter storms plowing across the southern, eastern and northeastern U.S. last week likely prompted thermal power plants to burn more natural gas to meet demand for heating, investors concluded, hoping Thursday''s supply report will reveal such a scenario.
Early withdrawal estimates for Thursday’s storage data range from 212 billion cubic feet to 268 billion cubic feet. Natural gas supplies fell by 127 billion cubic feet in the same week a year earlier.
Total U.S. natural gas storage stood at 1.686 trillion cubic feet as of last week, the lowest for this time of year since 2004.
Stockpiles of the fuel are likely to finish below 1 trillion cubic feet by the last week of March, the formal end of the winter heating season, for the first time since 2003.
Natural gas inventories have fallen sharply since November as frigid temperatures and heavy winter snows in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.
Forecasts for more cold weather fueled the rally as well.
Weather service provider MDA Weather predicted below-normal temperatures for a good chunk of the country in its six-to-10-day outlook.
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 April were up 0.31% and trading at $102.42 a barrel, while heating oil for March delivery were up 0.87% and trading at $3.1288 per gallon.