Natural gas futures trade near highest since June on cold weather

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Investing.com - Natural gas futures traded near a five-month high on Monday, as updated weather forecasting models continued to point to colder than average temperatures in key gas-consuming regions in the U.S.

Bullish speculators are betting that colder weather will increase demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.

On the New York Mercantile Exchange, natural gas futures for delivery in January traded at USD3.950 per million British thermal units during U.S. morning trade, down 0.1%.

Nymex January gas held in a range between USD3.899 per million British thermal units and USD3.952 per million British thermal units.

The January contract rallied to USD3.962 per million British thermal units on Friday, the highest since June 19, before settling up 1.51% to end at USD3.954.

Natural gas futures were likely to find support at USD3.873 per million British thermal units, the low from November 29 and resistance at USD3.982, the high from June 19.

Updated weather forecasting models called for chilly temperatures across most parts of the eastern half of the U.S. during the next two weeks.

Industry weather group MDA Federal said it expected a "broad cold pattern" across most parts of the U.S. in its 11-to-15 day forecast.

Meanwhile, U.S. supply levels remained in focus. The Energy Information Administration said last week that natural gas in storage fell by 13 billion cubic feet, compared to expectations for a withdrawal of 10 billion cubic feet.

Inventories fell by 2 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 15 billion cubic feet.

Total U.S. natural gas storage stood at 3.776 trillion cubic feet as last week, 2.6% below last year's unusually high level but 0.5% above the five-year average for this time of year.

Early withdrawal estimates for this week's storage data range from 109 billion cubic feet to 148 billion cubic feet, compared to a drop of 62 billion cubic feet during the same week a year earlier.

The five-year average change for the week is a decline of 41 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in January rose 0.9% to trade at USD93.55 a barrel, while heating oil for January delivery added 0.6% to trade at USD3.049 per gallon.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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