Natural gas prices hit 2-month highs

Natural gas futures rose to the highest level since February on Wednesday as concerns over tightening supply and forecast for cooler weather underpinned prices.

On the New York Mercantile Exchange, natural gas futures for delivery in June touched highs of $4.802 per million British thermal units, the most since February 24, and were last up 0.70% to $4.792.

Forecasts on Wednesday said that Midwest and eastern regions of the U.S. would see cooler temperatures continue through the weekend. A front of low pressure was expected to bring a larger spring storm early next week, covering much of the central and eastern U.S. going into the end of the month.

The forecasts raised concerns over whether natural gas producers will be able to refill inventories before the next heating season. Producers typically replenish inventories between April and October, when demand is lower.

Severely cold winter weather since November has pressured U.S. natural gas stockpiles to the lowest level in 11 years, and the first two storage increases of the season have been below average for the time of year.

The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 49% of U.S. households use natural gas for heating, according to the Energy Department.

Last week the U.S. Energy Information Administration reported that natural gas stockpiles in the week ended April 17 stood at 850 billion cubic feet. Analysts have estimated that inventories will need to rise to approximately 3.1 trillion cubic feet by November 1.

Elsewhere on the NYMEX, crude oil futures for delivery in June rose 0.19% to $101.94 a barrel, while heating oil contracts for June delivery were almost unchanged at $3.0055 per gallon.