Natural gas futures fluctuated between small gains and losses on Tuesday, but remained close to a ten-month high as warmer-than-normal temperatures across much of the U.S. next week boosted demand expectations for the fuel.
On the New York Mercantile Exchange, natural gas futures for July delivery traded at USD4.829 per million British thermal units during European morning trade, easing up 0.12%.
The July contract traded between a range of USD4.811, the daily low and USD4.845, the daily high.
Natural gas prices rose to the highest level since July 2010 on Monday after the Commodity Weather Group said that it expected above-average temperatures across the eastern U.S. states next week.
The weather group added that temperature through June 10 could be the warmest of the season so far for East Coast cities.
Houston, St. Louis, Chicago and New York City were expected to see daily highs above 90 degrees Fahrenheit this week, industry weather group MDA Federal said late Monday.
Hotter-than-normal weather increases the need for gas-fired electricity to power air conditioning, boosting demand for natural gas.
Meanwhile, the U.S. National Hurricane Center said Monday that an area of thunderstorms in the Caribbean Sea had a 50% chance of developing into a tropical cyclone within the next 48 hours.
The Atlantic hurricane season began on June 1. Natural gas prices can rise if storms are expected to enter the energy-rich Gulf of Mexico. The region last year accounted for about 10% of U.S. gas production.
Elsewhere, light sweet crude oil futures for delivery in July rose 0.3% to trade at USD99.16 a barrel, while heating oil for July delivery added 0.25% to trade at USD3.017 per gallon during European morning trade.
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