Investing.com - Investing.com - Natural gas futures rose more than 1% in post-Christmas trade on Wednesday, as near-term demand expectations for the heating fuel were boosted after the National Weather Service issued blizzard warnings across the U.S. East Coast.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD3.424 per million British thermal units during U.S. morning trade, up 1.35% on the day.
It earlier rose by as much as 1.65% to trade at a session high of USD3.433 per million British thermal units.
There was no floor or electronic trading on Tuesday because of the Christmas holiday.
The U.S. National Weather Service issued blizzard warnings over a 730 mile stretch, from New York to Arkansas earlier in the day.
The storm is expected to hit the Carolinas later Wednesday and then arrive in the U.S. Northeast early Thursday.
Extended weather forecasts showing colder-than-normal weather across most parts of the U.S. in the next seven-to-ten days further boosted sentiment on the heating fuel.
Heavy rain is expected in New York City until the end of the week, while snow is expected in much of upstate New York, Connecticut, Pennsylvania, and Massachusetts, Weather.com reported.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on winter heating demand.
Bullish speculators are betting on the cold weather boosting winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
The heating fuel has lost nearly 14% since touching a 14-month high of USD4.001 per million British thermal units on November 26, on speculation that temperatures won't be cold enough to erase a surplus of the fuel in storage.
Meanwhile, market players looked ahead to a closely watched U.S. government report on natural gas supplies on Friday.
Early withdrawal estimates for this week's storage data range from 66 billion cubic feet to 83 billion cubic feet. Inventories fell by 87 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 140 billion cubic feet.
Total U.S. gas supplies stood at 3.724 trillion cubic feet as of last week, 2% higher than last year at this time and 10% above the five-year average for this time of year.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February rallied 2.4% to trade at USD90.75 a barrel, while heating oil for February delivery rose 1.75% to trade at USD3.040 per gallon.
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