Traders also looked ahead to Thursday’s closely watched U.S. government report on natural gas supplies.
On the New York Mercantile Exchange, natural gas futures for delivery in September traded at USD2.837 per million British thermal units during U.S. morning trade, surging 2.25.
It earlier rose by as much as 2.5% to trade at a session high of USD2.848 per million British thermal units, which was the strongest level since August 10.
The U.S. National hurricane Center said earlier Tropical Storm Isaac was forecast to strengthen into a hurricane in the next 24 hours, as it headed toward the Leeward Islands in the Caribbean Sea.
The system packed maximum sustained winds of 40 miles per hour, below the minimum 74 mile per hour speed of a Category 1 hurricane.
Production in federal waters in the Gulf of Mexico account for about 10% of natural gas output and prices typically spike when storms threaten production. The U.S. Atlantic hurricane season began on June 1 and ends November 30.
Prices found further support after updated weather forecasts predicted warmer weather was expected to return to key gas-consuming regions in the U.S. over the next two weeks.
The Commodity Weather Group said much of the U.S. is heading into a "warm prevailing pattern" more moderate than peak-heat days of July, but characterized by above-normal temperatures.
Above-average summer temperatures increase the need for gas-fired electricity to cool homes, boosting demand for natural gas.
Meanwhile, market players shifted their focus to the U.S. Energy Information Administration’s closely watched weekly report on natural gas inventories scheduled for Thursday.
Early injection estimates range from 33 billion cubic feet to 52 billion cubic feet, compared to last year's build of 66 billion cubic feet. The five-year average change for the week is an increase of 53 billion cubic feet.
Total U.S. gas supplies stood at 3.241 trillion cubic feet as of last week, 16.8% above last year’s level and 13.5% above the five-year average level for the week, according to weekly supply data from the U.S. government.
Market analysts have warned that without strong demand through the rest of the summer cooling season, gas inventories will reach the limits of available capacity later this year.
Stocks peaked last year in November at a record 3.852 trillion cubic feet.
The storage surplus to last year will have to be cut by at least another 150 billion cubic feet in the 15 weeks left before winter withdrawals begin to avoid breaching the government's 4.1 trillion cubic feet estimate of total capacity.
A bout of extreme heat across much of the U.S. over the past two months helped boost natural gas prices above the key USD3.00-level in recent weeks. Prices rallied to a 2012 high of USD3.275 per million British thermal units on July 31.
But futures have come under heavy selling pressure since the start of August, losing almost 15% after extended weather forecasts pointed to milder weather across most parts of the U.S. in the next two weeks.
From a technical standpoint, prices were expected to find strong near-term support close to the 200-day moving average of USD2.705.
200-day moving averages are considered key trading levels for many investors, often serving as a floor for prices after big declines.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October eased up 0.05% to trade at USD96.89 a barrel, while heating oil for September delivery dipped 0.1% to trade at USD3.122 per gallon.
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