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Natural gas gains as forecasts extend cold snap duration

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Investing.com - " Natural gas prices jumped up on Friday after updated weather forecasting models said below-normal temperatures currently in place over much of the central and eastern U.S. may stick around a little longer than previously predicted.

On the New York Mercantile Exchange, natural gas futures for delivery in November traded at USD3.675 per million British thermal units during U.S. trading, up 1.25%.

The commodity hit a session low of USD3.594 and a high of USD3.684.

The November contract settled up 0.28% at USD3.629 per million British thermal units on Thursday.

Futures were likely to find support at USD3.557 per million British thermal units, Thursday's low, and resistance at USD3.869, the high from Oct. 16.

Near-term weather forecasts indicated earlier that below-normal temperatures across much of the eastern half of the U.S. may stick around until early November for parts of the Midwest as opposed to late October as previously forecast, which sparked a rally in natural gas markets.

Colder temperatures prompt more businesses and homes to throttle up on their heating, which hikes demand for the commodity at the nation's thermal power plants.

Meanwhile, prices also rose on demand from bargain hunters digesting Thursday's bearish supply report.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ended Oct. 18 rose by 87 billion cubic feet, above forecasts for an increase of 79 billion cubic feet.

Inventories increased by 54 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 75 billion cubic feet.

Total U.S. natural gas storage stood at 3.741 trillion cubic feet. Stocks were 92 billion cubic feet less than last year at this time and 77 billion cubic feet above the five-year average of 3.664 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 80 billion cubic feet below the five-year average, following net injections of 50 billion cubic feet.

Stocks in the Producing Region were 106 billion cubic feet above the five-year average of 1.139 billion cubic feet after a net injection of 33 billion cubic feet.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were up 0.76% and trading at USD97.85 a barrel, while heating oil for November delivery were up 0.09% and trading at USD2.9030 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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