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Natural gas prices soar as forecasts point to return of hot weather

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Investing.com - Natural gas prices shot up on Monday after updated weather forecasts pointed to above-normal temperatures settling in for a good portion the country.

Rising summer temperatures often hike the need for gas-fired electricity to cool homes and businesses, which increases demand for natural gas.

In the New York Mercantile Exchange, natural gas futures for delivery in August traded at USD3.732 per million British thermal units, up 3.17%.

The commodity hit a session low of USD3.613 and a high of USD3.746.

MDA Weather Services reported earlier that above-normal temperatures will hover over the northeastern, central and western states through July 22, which sent prices shooting up.

The forecasts replaced earlier calls for cooler-than-normal mercury readings, which allowed prices to fall in recent sessions.

Elsewhere, investors kept a close eye on Tropical Storm Chantal.

While the system remained out over the Atlantic Ocean by afternoon trading on Monday, long-range forecasting models pointed to the possibility of an arrival in the gas-rich Gulf of Mexico in several days.

Tropical weather systems in the Gulf of Mexico can send oil and gas prices rising, as rough weather often disrupts production.

Traders also kept an eye on U.S. inventory levels. Total U.S. natural gas storage stood at 2.605 trillion cubic feet as of last week, just 1.1% below the five-year average and 16% below last year's level.

Early injection estimates for this week's storage data range from 82 billion cubic feet to 102 billion cubic feet, compared to a 34 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 71 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in August were down 0.14% and trading at USD103.08 a barrel, while heating oil futures for August delivery were down 0.29% at USD2.9810 per gallon.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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