- Chicago may drop to 19 degrees Fahrenheit on Nov. 27
- `That gave us a little bit of a boost': analyst Flynn
Natural gas futures inched higher Monday as traders bet that a late-November cold spell would spur demand for the heating fuel.
Temperatures could be below normal for much of the Midwest through Nov. 30, according to Commodity Weather Group LLC. Chicago may fall to 19 degrees Fahrenheit (minus 7.2 Celsius) on Nov. 27, 10 degrees below normal, AccuWeather data show.
“Models are turning a bit colder, and that gave us a little bit of a boost,” said Phil Flynn, a senior market analyst at Price Futures Group in Chicago. “There’s still debate on the longer-term outlook for winter. As long as that stays mild, natural gas will have a hard time sustaining a rally.”
Natural gas for December delivery rose 2.4 cents, or 1 percent, to settle at $2.385 per million British thermal units on the New York Mercantile Exchange. Volume was 21 percent above the 100-day average at 2:37 p.m.
Futures started trading Monday at $2.449, the highest opening price since October 21. Traders pared most of those gains as contracts fluctuated within a six-cent range above Friday’s close of $2.361.
“The forecasts are for a short window of cold,” said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. “A real rally is going to be dependent on sustained cold, and so far we haven’t seen the factors point to that.”