Natural Gas Futures Cap Five-Day Winning Streak on Autumn Chill

  • Below-normal temperatures may blanket East Coast next week
  • Money managers' bearish gas wagers reached record last week

A chill is in the air, and bullish natural gas traders are bouncing back.

Gas futures climbed Monday for a fifth straight day, capping the longest winning streak since May. Below-normal temperatures will blanket the East Coast from Oct. 17 through Oct. 21 after warm weather this week, according to Commodity Weather Group LLC.

“There’s talk of some early season cold, which has been supportive for prices,” said Phil Flynn, a senior market analyst at Price Futures Group in Chicago. “As we get closer to winter, traders don’t want to be heavily short in this market.”

Natural gas for November delivery rose 3.3 cents, or 1.3 percent, to settle at $2.535 per million British thermal units on the New York Mercantile Exchange. Gas is down 12 percent this year.

The low in Boston on Oct. 17 may be 38 degrees Fahrenheit (3 Celsius), 8 less than average, AccuWeather Inc. data show. New York’s low may be 42 degrees on Oct. 19, 7 below normal. About 49 percent of U.S. households use gas for heating.

Net-Short Bets

Money managers’ net-short bets on four gas contracts climbed to a record in the seven days ended Oct. 6, U.S. Commodity Futures Trading Commission data show. Bearish wagers rose 6.3 percent to 150,450.

Gas demand from electricity producers may surge 16 percent this year to 25.8 billion cubic feet a day as generators take advantage of low prices, the Energy Information Administration said Oct. 6 in its monthly Short-Term Energy Outlook. Consumption by power plants is up 4.6 percent from a year ago Sunday, according to LCI Energy Insight in El Paso, Texas.

U.S. gas production slipped 0.3 percent in July to 89.46 billion cubic feet a day from the previous month, the EIA said Sept. 30 in its monthly EIA-914 supply report.

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