BLBG: Natural Gas Futures Gain Forecasts of Colder U.S. Weather
By Mario Parker
Nov. 10 (Bloomberg) -- Natural gas rose for the first time in three days on speculation colder weather will stoke demand for the heating fuel.
Lower temperatures are probable across much of the U.S. beginning Nov. 17, the Climate Prediction Center in Camp Springs, Maryland, said in its 14-day outlook. Temperatures in Chicago may fall to 25 degrees Fahrenheit (minus 3.9 Celsius) by Nov. 20 from 44 today, according to AccuWeather.com.
``The realization of winter has finally woken up the trolls,'' said Michael Rose, a director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. ``With the cold weather out there, natural gas is going up because it's the path of least resistance.''
Natural gas for December delivery climbed 40.5 cents, or 6 percent, to $7.162 per million British thermal units at 11:46 a.m. on the New York Mercantile Exchange. The gain was the biggest since Sept. 17, when gas advanced 8.7 percent.
About 42 percent of U.S. natural gas demand comes from industrial and commercial users. The winter heating season, in which demand outstrips supply, begins in November. About 52 percent of U.S. households relay on the fuel for heat.
Natural gas stockpiles for the week ended Oct. 31 totaled 3.405 trillion cubic feet, down 3.7 percent from year earlier, the Energy Department said Nov. 6. Inventories were 2.3 percent higher than the five-year average.
Prices have dropped 48 percent from a 30-month intraday high of $13.694 on July 2 as the economic slowdown crimped industrial demand for the fuel.
``The first real blast of cold weather'' has increased buying, said Carl Neill, an energy analyst at Risk Management Inc. in Chicago. ``It's long overdue. Seasonally, the market should be higher.''
The temperatures in New York may fall to as low as 27 degrees Fahrenheit by Nov. 20 from 63 degrees today, AccuWeather.com said.
To contact the reporters on this story: Mario Parker in Chicago at mparker22@bloomberg.net;