Investing.com - Natural gas futures eased higher U.S. afternoon trade on Monday, as near-term demand expectations for commodity were lifted by cooler weather forecasts in the U.S..
On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.570 per million British thermal units during U.S. afternoon trade, soaring 1.90%.
Earlier in the day, prices fell by as much as 0.95% to hit a session low of USD3.470 per million British thermal units, the cheapest level since October 18.
Updated weather forecasts released earlier showed that cool temperatures will descend on the U.S. in the next six-to-ten days. Bullish speculators are betting on the colder weather increasing early-winter demand for the heating fuel.
The Commodity Weather Group reported "a fast-moving cold push" will bring colder weather than previously forecast. The firm had previously predicted normal or above-normal temperatures across most of the continental U.S. from November 14 through November 23.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Prices found further support after Goldman Sachs raised its natural gas price forecast for 2013 to USD4.25 per million British thermal units, up from a previous projection of USD4.00.
The investment bank said in a report published earlier that natural gas drillers are cutting production due to low prices and this year's winter weather will return to normal after mild temperatures last year.
But gains were limited as concerns over bloated inventory levels also weighed. The U.S. Energy Information Administration said that that natural gas storage in the U.S. rose by 21 billion cubic feet last week.
Last year, stocks rose by 48 billion cubic feet, while the average rise in the week over the previous five years was 36 billion cubic feet.
Total U.S. gas supplies stood at 3.929 trillion cubic feet, an all-time record that surpasses the previous peak of 3.852 trillion cubic feet reached last November.
Stocks are 2.9% above a year ago and 6.6% above the five-year average for the week.
Early injection estimates for this week’s storage data range from 15 billion cubic feet to a drawdown of 5 billion cubic feet.
Inventories rose by 20 billion cubic feet in the same week a year earlier, while the five-year average change for the week is an increase of 17 billion cubic feet, according to U.S. Energy Department data.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January added 0.2% to trade at USD86.73 a barrel, while heating oil for December delivery rose 0.5% to trade at USD3.020 per gallon.