6 Nov 2013

Natural gains as weather forecasts call for East Coast cool snap


                     Natural gas prices rose on Tuesday after updated weather forecasting models called for below-normal temperatures across portions of the eastern half of the U.S. next week.

On the New York Mercantile Exchange, natural gas futures for delivery in December traded at USD3.464 per million British thermal units during U.S. trading, up 0.55%. 

The commodity hit a session low of USD3.381 and a high of USD3.473.

The December contract settled down 1.94% at USD3.445 per million British thermal units on Monday.

Futures were likely to find support at USD3.381 per million British thermal units, the earlier low, and resistance at USD3.869, the high from Oct. 16.

Updated weather forecasting models have called for normal to above-normal temperatures for much of the eastern U.S. through mid-November in recent days, though on Monday, many saw a cool snap settling in for several days before moderating around Nov. 9, which sent prices gaining on Tuesday.

Cooler temperatures hike the need for heating this time of year, boosting demand for natural gas at the nation's thermal power generators.

Inventory data released on Thursday also pressured prices lower.

The U.S. Energy Information Administration said on Thursday that natural gas storage in the U.S. rose by 38 billion cubic feet during the week before last.

Inventories rose by 66 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 57 billion cubic feet.

Total U.S. natural gas storage stood at 3.779 trillion cubic feet as last week, 3.1% below last year's unusually high level but 1.6% above the five-year average for this time of year.

Early injection estimates for this week’s storage data range from 33 billion cubic feet to 45 billion cubic feet, compared to a 27 billion cubic feet increase during the same week a year earlier.

The five-year average for the week is a build of 36 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were down 1.37% and trading at USD93.32 a barrel, while heating oil for December delivery were down 0.32% and trading at USD2.8649 per gallon. - investing.com

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