Sept. 2 (Bloomberg) -- Natural gas futures rose for the fifth time in six days in New York amid speculation that warmer weather will increase demand for the fuel from power stations.
Futures gained as much as 3 percent in electronic trading, the highest intraday level since July 25. The western half of the U.S. will experience warmer-than-normal temperatures from Sept. 2 to Sept. 11, according to data from the website of AccuWeather Inc. in State College, Pennsylvania. Power generation accounts for about 32 percent of U.S. gas demand.
“Weather in the northern part of the U.S. is very warm, thus gas demand for electricity is also very strong,” said Stephen Schork, the president of Schork Group Inc., a consultant in Villanova, Pennsylvania. “A lot of speculative money moved to the sidelines this summer and it looks like that money could be coming back into the market.”
The October contract increased 8.1 cents, or 2.3 percent, to $3.662 at the 1:15 p.m. close of electronic trading on the New York Mercantile Exchange, on volume that was 88 percent below the 100-day average. There was no floor trading or settlement price because of the U.S. Labor Day holiday. Electronic trading will resume at 6 p.m.
The contract had declined 1 percent to settle at $3.581 Aug. 30, trimming the first monthly gain since April to 3.9 percent.
The discount of October to November futures narrowed 0.4 cent to 9.9 cents. October gas traded 35.9 cents below the January contract, compared with 34.5 cents Aug. 30.
Gas inventories totaled 3.13 trillion cubic feet in the week ended Aug. 23, 1.5 percent above the five-year average and 7 percent below last year’s supplies, Energy Information Administration data show.
The number of rigs drilling for natural gas in the U.S. fell by seven this week to 380, according to a report Aug. 30 from Baker Hughes Inc. in Houston. The total has declined 12 percent this year.
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