Natural-gas traders welcomed summer by pushing futures to a new three-week high.
The trading floor was closed Monday for Memorial Day, the traditional start of summer in the U.S. The return of hot weather has traders betting on an increase in demand for natural gas to power air conditioners.
Natural gas for July delivery rose 14.8 cents, or 3.3%, to settle at $4.666 a million British thermal units on the New York Mercantile Exchange.
Many U.S. cities saw the highest temperatures of the year over the long weekend, and private forecaster MDA EarthSat said hotter-than-normal temperatures should linger through Saturday east of the Rockies.
Starting Sunday temperatures will ease in northern New England, but "much-above-normal temperatures" will "encompass most of the Midwest" and "hot conditions will continue to loom over the South," the meteorologists said.
The onset of summer heat puts the weather "clearly back on the table as a significant motivator of price," analysts with trading advisory Ritterbusch & Associates wrote in a client note.
However, "we are still having some difficulty constructing a price scenario that would lift nearby futures much above this morning's levels of about $4.65 level, at least on a sustained basis," the analysts wrote.
Citi Futures Perspective analyst Tim Evans said prices seem to be "rallying in spite of weak data."
On Thursday, the Energy Information Administration said U.S. gas stockpiles rose by 105 billion cubic feet last week, the largest increase in supplies of the year. The injection was greater than the prior year's, the five-year average and the estimate of traders and analysts.
On Friday, Baker Hughes Inc. said the number of rigs drilling for natural gas in the U.S. rose to 881, up 15 from the week before. Traders look to the gas rig count, which had fallen the previous three weeks, for production signals.