U.S. natural gas futures pushed higher on Monday, bouncing back from sharp falls last week as market players looked ahead to cold weather forecast in key gas-consuming regions in the U.S. which should boost demand for the heating fuel.
Natural gas for December delivery on the New York Mercantile Exchange rose 4.9 cents, or 1.77%, to $2.816 per million British thermal units by 10:20AM ET (15:20GMT), after jumping to $2.876 in early trade.
Updated weather forecasting models revealed that a strong cold blast with rain and snow will arrive into the eastern U.S. by next week for the first relatively cold Fall-like weather system this year.
Natural gas futures lost nearly 11% last week as warmer-than-average weather in key gas-consuming regions in the U.S. ignited speculation that a mild winter will curtail demand for the heating fuel and leave a glut of it in storage, weighing on prices next year.
Gas futures often reach a seasonal low in October, when mild weather reduces demand, before recovering in the winter, when heating-fuel use peaks.
Meanwhile, market participants awaited weekly supply data due on Thursday, which is expected to show a build in a range between 51 and 61 billion cubic feet in the week ended November 4.
That compares with a gain of 54 billion cubic feet in the preceding week, 54 billion a year earlier and a five-year average build of 38 billion cubic feet.
Total natural gas in storage currently stands at 3.963 trillion cubic feet, according to the U.S. Energy Information Administration, 1.2% higher than levels at this time a year ago and 4.4% above the five-year average for this time of year.
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