Investing.com - U.S. natural gas futures rose to a new 16-month high for the second day in a row on Wednesday, amid forecasts for warmer than normal temperatures across most parts of the continental U.S. and as traders looked ahead to fresh weekly information on U.S. gas inventories.
Natural gas for delivery in October on the New York Mercantile Exchange rose to an intraday peak of $3.098 per million British thermal units, a level not seen since May 19, 2015.
It was last at $3.061 by 9:42AM ET (13:42GMT), up 1.4 cents, or 0.46%.
A day earlier, futures soared 11.3 cents, or 3.85%, after weather reports suggested more heat and high demand for gas-fired power through the end of September.
Meanwhile, market players looked ahead to weekly supply data due on Thursday, which is expected to show a build of approximately 50 billion cubic feet in the week ended September 16.
That compares with a gain of 62 billion cubic feet in the preceding week, 105 billion a year earlier and a five-year average build of 83 billion cubic feet.
Total natural gas in storage currently stands at 3.499 trillion cubic feet, according to the U.S. Energy Information Administration, 5.3% higher than levels at this time a year ago and 8.6% above the five-year average for this time of year.
Despite the recent rally, gains are likely to remain limited as traders react to the reality that higher summer demand for the commodity is coming to an end.
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.
But with autumn due to start on September 22, power burns to feed air conditioning demand have probably peaked for now, market analysts said.
Unless intense late-summer heat boosts demand from power plants, stockpiles could possibly test physical storage limits of 4.3 trillion cubic feet at the end of October.
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