Natural gas futures gain for sixth day on cold weather view

Natural gas futures (NYBOT:NGZ13) climbed for a sixth day in New York, heading for the longest bullish streak in more than a year, as meteorologists predicted colder-than-normal weather that would stoke heating-fuel demand.

Gas gained as much as 2% as MDA Weather Services in Gaithersburg, Maryland, forecast below normal temperatures in the eastern half of the U.S. through Nov. 16, followed by cooler-than-average readings in the Midwest through Nov. 21. The low in Chicago on Nov. 19 may be 18 degrees Fahrenheit (minus 8 Celsius), 15 below normal, according to AccuWeather Inc.

“Temperatures are starting to drop across the Midwest and East,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The forecast for the second part of November has shifted a little bit colder and the market is trying to keep the rally going.”

Natural gas for December delivery rose 5.4 cents, or 1.5%, to $3.628 per million British thermal units at 9:21 a.m. on the New York Mercantile Exchange, heading for the longest streak of gains since the six days ended Oct. 2, 2012. Trading volume was 73% above the 100-day average. Prices have climbed 8.2% this year.

The discount of December to January futures narrowed 0.9 cent to 4 cents. March gas traded 1.8 cents above the April contract, compared with 1.1 cents yesterday.

December $3 puts were the most active options in electronic trading. They were unchanged at 0.1 cent per million Btu on volume of 501 at 9:46 a.m. Puts accounted for 53% of trading volume.

Below Normal

The low in Minneapolis on Nov. 19 may be 11 degrees Fahrenheit, 13 less than usual, AccuWeather data show. About 49% of U.S. households use gas for heating, according to the Energy Information Administration, the Energy Department’s statistical arm.

The U.S. may have 1.3% more heating-degree days, a measure of weather-driven energy demand, from November to March compared with the same period last year, Commodity Weather Group LLC in Bethesda, Maryland, said in an Oct. 15 seasonal outlook.

Gas inventories totaled 3.814 trillion cubic feet in the week ended Nov. 1, EIA data show. Supplies were 1.5% above the five-year average and 2.9% below year-earlier stockpiles.

The number of rigs drilling for natural gas in the U.S. climbed by five last week to 365, Baker Hughes Inc. in Houston said Nov. 8. The total is down 15% this year.

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