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Natural gas futures rally to 1-month high on demand hopes

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Investing.com -

Investing.com - U.S. natural gas prices rallied to hit a fresh one-month high on Tuesday, as investors bet that chilly weather across the U.S. will boost early-winter demand for the heating fuel.

On the New York Mercantile Exchange, natural gas for delivery in December rose to a session high of $4.104 per million British thermal units, the most since October 1.

Prices last traded at $4.084 during U.S. morning hours, up 3.8 cents, or 0.93%.

A day earlier, natural gas prices surged 17.3 cents, or 4.47%, to settle at $4.046 per million British thermal units.

Futures were likely to find support at $3.989 per million British thermal units, the low from November 3, and resistance at $4.184, the high from October 1.

Updated weather-forecasting models called for unusually cold temperatures across the eastern half of the U.S. from November 8 through November 17.

Bullish speculators are betting on the chilly weather to increase early-winter demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.

Meanwhile, the U.S. Energy Information Administration's next storage report slated for release on Thursday is expected to show an increase of 80 billion cubic feet for the week ending October 31.

Inventories rose by 35 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 42 billion cubic feet.

Natural gas storage in the U.S. rose by 87 billion cubic feet last week.

Injections of gas into storage have surpassed the five-year average for 28 consecutive weeks, alleviating concerns over tightening supplies.

Total U.S. natural gas storage stood at 3.480 trillion cubic feet as of last week, narrowing the deficit to the five-year average to 8.2% from 9.1% in the preceding week and from a record 54.7% at the end of March.

Elsewhere on the Nymex, crude oil for delivery in December lost $2.00, or 2.54%, to trade at $76.78 a barrel, while heating oil for December delivery dipped 2.03% to trade at $2.439 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 Nasdaq, Inc.


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

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