Natural gas futures extended gains in New York on speculation that increased demand from electricity generators because of fuel switching will help reduce a supply surplus.
Natural gas for October delivery rose as much as 1 percent to $2.952 per million British thermal units in electronic trading today on the New York Mercantile Exchange and sold for $2.944 at 11 a.m. Singapore time. The more-actively traded November contract rose as much as 0.6 percent to $3.124.
The October contract, which expires today, increased 8.7 cents yesterday to $2.924 per million Btu, the highest settlement price since Sept. 14. The futures are down 1.5 percent this year.
Power plants have consumed 27.3 billion cubic feet of gas a day this month, up 21 percent from the same period a year ago, data from LCI Energy Insight in El Paso, Texas, show. A supply glut has eased as electricity generators burned more gas instead of coal.