U.S. natural gas futures ended higher on Tuesday for a third day, reacting to more bullish technicals and to signs that record production might finally be slowing despite fading weather demand and still-high supplies.
Talk of more supply cuts by producers had backed some of the recent buying, traders said. Upside momentum picked up Monday after a government report showed gross gas production slipped in February, a possible sign that a steep decline in gas drilling this year was finally taking a toll on output.
Technical buying and short covering also fueled recent gain safter front-month futures on Friday settled above the 40-day moving average for the first time in five months.
While moderating spring temperatures in northern tier states this week should slow weather-related demand, utility switching from coal to cheaper gas to generate electricity has given a huge boost to gas-fired power loads and tightened the market.