Sept. 11 (Bloomberg) -- Natural gas in New York rose as crude oil climbed to a record and the government said consumption will increase above an earlier forecast.

Oil rose on speculation plans the Organization of Petroleum Exporting Countries to boost daily oil production by 500,000 barrels will not be enough to meet growing demand. Natural-gas consumption this year will rise 4.5 percent to 22.81 trillion cubic feet from 21.82 trillion last year, the Energy Department said in a monthly report.

Natural gas is ``watching the crude market for its cue over the near term,'' said Chris Jarvis, president of Caprock Risk Management in Hampton Falls, New Hampshire. There is no production threat from a tropical storm and demand for electricity to run air conditions is waning with the end of summer, leaving ``the natural gas market to look for direction.''

Gas for October delivery rose 4.3 cents, or 0.7 percent, to $5.934 per million British thermal units at the 3:32 p.m. settlement of floor trading on the New York Mercantile Exchange. Gas yesterday advanced 7.1 percent, its highest percentage gain since Jan. 30.

OPEC's production target is 27.2 million barrels a day, beginning Nov. 1.

Crude oil for October delivery rose 74 cents, or 1 percent, to settle at $78.23 a barrel at 2:48 p.m. on the New York Mercantile Exchange. It's the highest since trading began in 1983. The previous record close of $78.21 was reached on July 31. Prices are up 19 percent from a year ago.

Outlook Changes

The Energy Department in its monthly Short-Term Energy Outlook last month forecast a 4 percent consumption increase. Although consumption will rise for the year, gas will cost less. Prices will average $7.31 per thousand cubic feet this year, down from the $7.45 estimated last month. The price will rise 10 percent in 2008 to $8.07 per thousand cubic feet.

Earlier in the trading session, gas climbed amid speculation the growth of inventories is slowing.

Inventories probably expanded by 60 billion cubic feet for the week ended Sept. 7, the median of eight responses in a Bloomberg survey of analysts. Estimates ranged from 53 billion to 70 billion cubic feet. The five-year average increase for the week is 88 billion and supplies rose 108 billion in the same week a year earlier.

``We do have a smaller injection than last year expected for last week,'' said Lisa Zembrodt, a commodity analyst at Summit Energy Services Inc. in Louisville, Kentucky. ``Typically this is the peak of injections.''

Storage Needs

``We'd need to have 80 billion cubic feet to maintain the year-over-year surplus, so we're likely to see a deficit this week,'' Zembrodt said. She forecast supplies rose 55 billion cubic feet for the week.

Inventories stood at 3.005 trillion cubic feet for the week ended Aug. 31, the most ever for that date.

As gas prices move, they will find support at $5.89 and then at $5.65, based on a review of the monthly price continuation chart, technical analyst Veronique Lashinski at Fimat USA in Chicago said in a report.

At a price of $5.65 per million Btu or above, ``the short- term outlook remains very strong,'' she said. ``The strength is in the very short-term and the medium-term outlook remains bearish.''

Resistance points are at $6.121 and $6.50 per million Btu, Lashinski said.

To contact the reporter on this story: Reg Curren in Calgary at rcurren@bloomberg.net.

Last Updated: September 11, 2007 15:39 EDT