Natural gas prices that have fallen steadily for a year are bouncing back sharply, up 16 percent since Monday, raising questions about whether prices fell too far.

After rising as much as 9 percent, natural gas was trading up 5 cents at $3.35 per 1,000 cubic feet near the close Tuesday on the New York Mercantile Exchange.

That is still far from the $14 that natural gas commanded last summer, before the recession destroyed demand for gas, gasoline and jet fuel. Demand has been especially weak from major industrial customers.

Yet given the fact that storage facilities are brimming with gas, the $1 spike since the beginning of the month has many energy analysts skeptical.

"No doubt, gas is cheap," analyst and trader Stephen Schork wrote Tuesday. "But, if there is no value, then cheap, in and of itself, is not a reason to own something. Back in the 1980s the Yugo GV was cheap also. The car was cheap for a reason. Its Soviet-bloc engineering ... exuded the feeling it was assembled at gunpoint. Gas today is cheap for a reason. There is too damn much of it."

Natural gas in key storage facilities is nearing capacity, some exceeding 97 percent.

How much more gas can be pumped into the massive caverns that are used for storage is key. The U.S Energy Information Administration said in its short-term energy outlook that it expects another 12 percent buildup through October.

It is, however, the time of year when people begin to think about heating their homes, and that means more natural gas may be flowing out of storage.

Prices hit $2.409 on Sept. 4, a seven-year low, on the eve of the heating season.

"The easy answer is that it was just too cheap," PFGBest analyst Phil Flynn said. "Not the answer perhaps you were looking for but perhaps it is the most accurate one."

Even with prices rebounding this week, most homeowners who use natural gas for heat are likely to see much cheaper heating bills. Not only are natural gas prices cheaper, but most forecasters are expecting a mild winter.

But energy, just because it's relatively cheap right now, has not led people to use more of it. That is apparent in gasoline sales, according to a SpendingPulse report by MasterCard on Tuesday.

The four-week average for gasoline consumption in the U.S. fell 3.2 percent for the week ended Friday, the ninth straight weekly decline, even though gasoline is one-third cheaper than a year ago, according the report.

MasterCard's report is based on aggregate sales activity in the MasterCard payments network, coupled with estimates for all other payment forms, including cash and check.

Crude futures also rebounded strongly Tuesday because of the weakened U.S. currency.

Benchmark crude for October delivery rose 2.8 percent, or $1.90 to $70.76 a barrel. On Monday, the contract fell 43 cents to settle at $68.86.

U.S. oil inventories are higher now than in May, and analysts expect demand to drop off in the autumn following the summer driving season. The government will report storage levels Wednesday, which can have a big impact on energy prices.

Analysts are expecting a drop in crude supplies and an increase in stocks of gasoline, diesel fuel and heating oil, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Retail gas prices continue to edge lower. Prices at the pump fell 0.9 cents overnight to $2.563 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are down 8 cents a gallon from a month ago and $1.279 from a year ago.

In other Nymex trading, gasoline futures for October rose 5 cents to $1.7934 a gallon and heating oil rose 4.7 cents to $1.7888 a gallon.

In London, Brent crude fell 28 cents to $67.16 on the ICE Futures exchange.