NEW YORK: US spot natural gas prices rose across the country for a second straight day on Tuesday, boosted by warm weather increasing air-conditioning demand in some regions as well as above-normal nuclear power plant outages.
Traders also said cash gas was rising in tandem with a second straight day of gains in the gas futures market, where prices were lifted by forecasts for continued warm weather through the remainder of the month.
The Weather Channel's weather.com said a warm, humid air mass was stalled in the South, where high temperatures were mostly in the 80s and 90s Fahrenheit this week.
More heat was also on tap for the West, where highs were in the 90s to well over 100 degrees F in some areas. Milder weather was likely midweek in the Midwest and Northeast after a warm start to the week.
Gas for Wednesday delivery at the nation's benchmark, Henry Hub <NG-W-HH> in Louisiana, rose 12 cents on average to $3.90 per million British thermal units, after gaining 2 cents on Monday for gas delivered on Tuesday.
Hub cash gas fell late last week to $3.73, its lowest average since early March, according to Reuters data.
Late deals were done at 3 cents under the front-month July natural gas futures contract on the New York Mercantile Exchange , easing slightly from deals done late Monday about even with the front month.
On NYMEX, the front-month contract rose 3 cents to settle at $3.905, extending Monday's gain of nearly 4 percent.
Tuesday's Hub average remained well below the June monthly index of $4.15, but was still well above the year-ago price of $2.45. Hub cash prices bottomed out last year in late April at a 10-year low of $1.82.
In major consuming markets, gas on the Transco pipeline at the New York citygate <NG-NYCZ6> rose 9 cents to $3.98, while Chicago gas <NG-CHGC> was also 9 cents higher on the day at $3.95. In the news on Tuesday, an explosion on the Florida Gas Transmission system in Washington Parish, Louisiana, destroyed a mobile home and caused an evacuation of the area, but no injuries were reported, local officials said.
The line transports gas from Texas to South Florida. A spokeswoman said the line segment had been isolated and gas was rerouted. Regional gas prices on FGT were up 9 cents on the day at $4.12, according to ICE, in line with other cash prices and likely not due to the explosion, traders said.
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Nuclear plant outages totaled 8,200 megawatts, or 8 percent of US capacity, down from 8,500 MW out on Monday and 9,100 MW out a year ago, but up from a five-year average outage rate of 6,600 MW.
Last week's gas storage report from the US Energy Information Administration showed domestic gas inventories rose the prior week by 95 billion cubic feet to 2.347 trillion cubic feet.
(Storage graphic: http://link.reuters.com/mup44s)
Early injection estimates for Thursday's EIA report range from 86 bcf to 96 bcf, versus a 63-bcf build in the same week last year and a five-year average rise for that week of 80 bcf.
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