Investing.com - U.S. natural gas prices rallied for the second consecutive session on Tuesday, as forecasts for more cold over the next two weeks boosted heating demand expectations.
On the New York Mercantile Exchange, natural gas for delivery in March rose by as much as 8.4 cents, or 3.13%, to hit a daily high of $2.681 per million British thermal units, before trading at $2.666 during U.S. morning hours, up 6.9 cents, or 2.64%.
A day earlier, natural gas prices tacked on 1.8 cents, or 0.7% to settle at $2.597 as heavy snowfall in the heavily populated Northeast region lured the bulls back to the market.
Futures were likely to find support at $2.567 per million British thermal units, the low from February 6, and resistance at $2.698, the high from February 4.
The National Oceanic and Atmospheric Administration said late Monday that cooler temperatures were expected to make their way into the southeast U.S. and with snow and freezing rain possible in the Northeast.
The U.S. Northeast is a key gas-heating area. 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.
Despite recent gains, natural gas prices are likely to remain vulnerable amid speculation supplies are more than ample to meet demand.
Total U.S. natural gas storage stood at 2.428 trillion cubic feet as of last week, 24% above year-ago levels and just 1.2% below the five-year average for this time of year.
Last spring, supplies were more than 50% below the five-year average, indicating producers have almost completely made up for last winter's unusually strong demand.
Nymex natural gas prices lost 8.5 cents, or 4.16%, last week, capping the tenth weekly decline in the past 11 weeks. Futures are down almost 44% since mid-November as an unusually mild start to winter limited demand while production soared.
Elsewhere on the Nymex, crude oil for delivery in March slumped 95 cents, or 1.8%, to trade at $51.91 a barrel, while heating oil for March delivery shed 0.58% to trade at $1.862 per gallon.
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