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Investing.com – Natural gas prices are down nearly 40% at the half-year mark. But with futures of the fuel posting their best monthly return in a year, traders are more optimistic about the second half as summer heat begins to stir more gas-driven cooling demand.

Most-active the New York Mercantile Exchange’s Henry Hub rose 9.7 cents, or 3.6%, to settle at $2.7980 per mmBtu, or million metric British thermal units. For the week, gas futures were up 2.5%; for the month they rose 24% while for the quarter, they were up 26%.

For the year though, gas futures on the hub posted a loss of 37%.

It has been an interesting time for natural gas, with bulls managing to keep the market in the positive for most of June despite the mixed heat trends across the country.

But it has also been a slow-burn rally due to temperature extremities in the South versus the benign conditions of the Northeast; and LNG maintenance versus reasonably stout gas production and renewables generation.

Gas-driven cooling demand rising by the day

While summer weather hasn’t hit its typical baking point across the country, cooling demand is inching up by the day, particularly in Texas. This has sparked realization in the trade that higher price lows might be more common than new bottoms. The lowest Henry Hub’s front-month got to this week was $2.138, versus the $2.136 bottom seen at the start of June.

Indicators on air-conditioning demand, released Thursday by Refinitiv, the data arm of Reuters, showed there were around 65 CDDs, or cooling degree days, last week — close to the 30-year normal of 70 CDDs for the period.

CDDs, used to estimate demand to cool homes and businesses, measure the number of degrees a day’s average temperature is above 65 degrees Fahrenheit.

has, meanwhile, seem smaller injections than forecast. Thursday’s update by the Energy Information Administration, or EIA, showed a build of 76 bcf, or billion cubic feet, for the latest week to June 23. Industry analysts tracked by Investing.com had forecast a build of 83 bcf versus the previous storage gain of 95 bcf for the week to June 16.

With the latest stock gain, total gas held in inventory across the United States stood at 2.239 tcf, or trillion cubic feet. That was 25.3% above the same week a year ago and about 14.6% above the five-year average.