Natural gas futures climbed for a second day in New York on forecasts of cold mid-December weather in the eastern and central U.S. that may spark demand for the heating fuel.
Futures gained as below-normal temperatures are likely in the Northeast, Southeast and Midwest from Dec. 7 through Dec. 16, according to Commodity Weather Group in Bethesda, Maryland. Heating demand from Dec. 8 through Dec. 12 may be 15 percent above normal levels, according to David Salmon, a meteorologist with Weather Derivatives in Belton, Missouri.
“The cold weather is becoming very much like a bad holiday guest, arriving early and staying later than expected,” said Peter Beutel, president of energy advisory company Cameron Hanover in New Canaan, Connecticut. “As long as we have colder weather, we can always burn some hydrocarbons.”
Natural gas for January delivery rose 3.5 cents, or 0.8 percent, to $4.304 per million British thermal units at 9:31 a.m. on the New York Mercantile Exchange. Gas futures have dropped 23 percent this year.
The low temperature in New York on Dec. 11 may be 26 degrees Fahrenheit (minus 3 Celsius), 5 degrees below normal, according to AccuWeather Inc. in State College, Pennsylvania. The low temperature in Chicago may be 17 Fahrenheit, 7 degrees below normal.
“There will be a swath of snow with this system from the northern Plains to the Middle Atlantic coast,” wrote Paul Pastelok, senior forecaster for AccuWeather Inc., in a note to clients. “Another press of cold will follow and could lead to a freeze into Florida.”
The Energy Department may say in a report due at 10:30 a.m. Washington time that stockpiles fell by 29 billion cubic feet in the week ended Nov. 25, according to the median of 24 analyst estimates compiled by Bloomberg. The five-year average decline for the week is 36 billion cubic feet.
Inventories of the fuel in the week ended Nov. 19 were 9.5 percent above the five-year average, wider than a 9.3 percent surplus the previous week, the Energy Department said on Nov. 24.
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