Forexpros – Natural gas futures rose sharply on Friday, jumping to the highest level since early September as expectations that oncoming early season winter weather will boost heating demand in the U.S. buoyed prices.
On the New York Mercantile Exchange, natural gas futures for delivery in December settled at USD3.926 per million British thermal units by close of trade on Friday, jumping 2.25% over the week, the third consecutive weekly gain.
The December contract rose to USD3.934 per million British thermal units earlier Friday, the highest price since September 15.
Natural gas prices rallied nearly 4.3% on Friday as forecasts called for near-freezing temperatures throughout much of the northeastern U.S. states through the first week of November, with potential weekend snowfall expected from Maryland through Maine.
According to the U.S. National Weather Service, weekend snowfall was forecast across upstate New York, with the storm expected to worsen as it moved towards northern New England.
October snowfall is rare in New York; there had been just three October days with measurable snowfall in Central Park since record-keeping began 135 years ago, according to the NWS.
Meanwhile, weather service provider AccuWeather expected temperatures in the U.S. Northeast and Midwest to remain below normal through November 4, with overnight lows dropping to the 30’s Fahrenheit (0 Celsius) area.
Wall Street lender Citigroup said Friday that it expected prices to rise to USD4.50 in the near-term, as demand will increase in December as temperatures fall.
“Week by week and month by month we’ll be seeing stronger demand,” the lender said in a report. Last year, demand increased by 74% from October to January, pushing prices as high as USD4.606 in December, the report added.
Despite the strong gain, natural gas prices were expected to remain under pressure amid concerns over rising inventory levels in the U.S.
On Thursday, the U.S. Energy Information Administration said in its weekly supply report that natural gas storage in the U.S. rose by 92 billion cubic feet last week.
Analysts had expected U.S. natural gas storage to rise by 90 billion cubic feet. Supplies climbed by 74 billion cubic feet in the same week a year earlier, while the five-year average change is a buildup of 47 billion cubic feet.
Elsewhere on the Nymex, light sweet crude oil futures for December delivery traded at USD93.55 a barrel by close of trade on Friday, rallying 6.75% over the week, while heating oil for December delivery dropped 1.82% on the week to trade at USD3.070 per gallon by close of trade Friday.
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