Investing.com - Natural gas futures rallied on Tuesday, extending sharp gains from the last session as updated weather forecasting models showed a return to cold winter weather which should boost demand for the heating fuel.
U.S. natural gas futures jumped 5.5 cents, or around 1.8%, to $3.072 per million British thermal units by 8:45AM ET (1345GMT).
It surged 10.1 cents, or 3.5%, on Monday, the biggest daily gain since Nov. 6.
Monday's rally came as weather models predicted much colder weather across most parts of the continental United States starting from Dec. 6, along with areas of rain and snow. Initial forecasts called for mild weather during the period.
Natural gas futures have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early-winter heating demand.
Prices of the fuel typically rise ahead of the winter as colder weather sparks heating demand.
The heating season from November through March is the peak demand period for U.S. gas consumption.
Meanwhile, market participants looked ahead to this week's storage data due on Thursday, which is expected to show a draw in a range between 40 and 52 billion cubic feet (bcf) in the week ended Nov. 24.
That compares with a drop of 46 bcf in the preceding week, a fall of 50 bcf a year earlier and a five-year average decline of 47 bcf.
Total natural gas in storage currently stands at 3.726 trillion cubic feet (tcf), according to the U.S. Energy Information Administration. That figure is 319 bcf, or around 7.9%, lower than levels at this time a year ago and 121 bcf, or roughly 3.2%, below the five-year average for this time of year.
Analysts estimated the amount of gas in storage would end the April-October injection season at 3.8 tcf due primarily to higher liquefied natural gas shipments abroad. That would fall short of the year-earlier record of 4.0 tcf and the five-year average of 3.9 tcf.