Natural gas futures - weekly outlook: November 25 - 29


Shutterstock photo - Natural gas futures rallied nearly 2% to hit a five-week high on Friday, 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 jumped 1.9% on Friday to settle the week at USD3.811 per million British thermal units.

Nymex gas prices rallied to a session high of USD3.830 earlier, the strongest level since October 16. The January contract settled 0.73% higher on Thursday to end at USD3.740 per million British thermal units.

Natural gas futures were likely to find support at USD3.722 per million British thermal units, the low from November 22 and resistance at USD3.868, the high from October 16.

On the week, December natural gas prices rose 3.96%, the third consecutive weekly gain.

Updated weather forecasting models called for chilly temperatures across most parts of the eastern half of the U.S. during the next six-to-ten-days.

Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on early-winter heating demand.

Meanwhile, upward momentum from Thursday's bullish U.S. supply data also remained intact. The Energy Information Administration said that natural gas storage in the U.S. fell by 45 billion cubic feet, compared to expectations for a withdrawal of 33 billion cubic feet.

Inventories fell by 36 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 2 billion cubic feet.

Total U.S. natural gas storage stood at 3.789 trillion cubic feet as last week, 2.3% below last year's unusually high level but 0.4% above the five-year average for this time of year.

Early estimates for next week's storage data range from a build of 7 billion cubic feet to a draw of 4 billion cubic feet, compared to a drop of 2 billion cubic feet during the same week a year earlier.

The five-year average change for the week is a decline of 15 billion cubic feet.

Elsewhere in the energy complex, light sweet crude oil futures for January delivery settled at USD94.84 a barrel by close of trade on Friday, up 1.05% on the week.

Meanwhile, heating oil for January delivery rose 3.22% on the week to settle at USD3.039 per gallon by close of trade Friday. offers an extensive set of professional tools for the financial markets.
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This article appears in: Investing Forex and Currencies
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