Investing.com - U.S. natural gas futures rose sharply on Monday, as updated weather forecasting models pointed to seasonably cold weather through the next two weeks, lifting near-term demand expectations for the heating fuel.
Forecasts originally called for mild winter weather during the period, prompting traders to close out bets on lower prices.
Bullish speculators are betting on the cold weather to increase winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
Natural gas for delivery in March on the New York Mercantile Exchange rallied 8.7 cents, or 4.22%, to trade at $2.150 per million British thermal units by 15:30 GMT, or 10:30AM ET, after rising to an intraday peak of $2.167, the most since February 1.
Natural gas storage in the U.S. fell by 152 billion cubic feet last week, according to the U.S. Energy Information Administration, compared to expectations for a decline of 158 billion.
That compared with draws of 211 billion cubic feet in the prior week, 115 billion cubic feet in the same week last year and a five-year average of 178 billion.
Total U.S. natural gas storage stood at 2.934 trillion cubic feet, 16.7% higher than levels at this time a year ago and 15.1% above the five-year average for this time of year.
The EIA's next storage report slated for release on Thursday, February 11 is expected to show a withdrawal of approximately 155 billion cubic feet for the week ending February 5.
Inventories fell by 160 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of around 162 billion cubic feet.
Elsewhere on the Nymex, crude oil for delivery in March dropped $1.00, or 3.23%, to trade at $29.89 a barrel, while heating oil for March delivery shed 0.25% to trade at $1.056 per gallon.
Investing.com offers an extensive set of professional tools for the financial markets.
Read more News on Investing.com and download the new Investing.com apps for Android and iOS! http://glocdn.investing.com/news/LYNXNPEC0L0AZ_M.jpg
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.