U.S. GAS : Natural Gas Edges to New High in Choppy Trading
10/22/2012| 10:41am US/Eastern
By John M. Biers
NEW YORK--Front-month natural-gas futures were up slightly in choppy trading Monday morning as the market edged toward new highs following the surge in the commodity late last week.
Natural gas for November delivery rose 1.1 cents, or 0.3%, to recently trade at $3.628 a million British thermal units on the New York Mercantile Exchange. However, the futures contracts for the subsequent months of December and January were both slightly lower.
If natural gas closes higher Monday, that would mark the fourth straight session of higher prices and a new peak level for 2012. Bob Yawger, director of energy futures at Mizuho, characterized the latest rally as a "momentum thing," rather than a jump based on fundamentals after the new peak reached late last week.
"Nobody wants to be left behind on a five- or 10-cent move on natural gas," Mr. Yawger said.
Weather forecasters presented a mixed outlook for the coming period.
Weather forecasters agree that much of the territory in the critical heating regions of the Northeast and Midwest will see above-normal temperatures this week. That should depress the demand for natural gas used for heating or to fuel gas-fired electricity plants.
However, the outlook for the subsequent period in the six-10 day forecast looks significantly cooler, likely demanding an uptick of natural gas use.
"It's a pretty significant difference, week-to-week," said Bob Haas, a meteorologist at MDA EarthSat Weather, a private forecaster.
Mr. Haas said the colder weather in the six-10 day period is expected to include below-freezing temperatures for a few days in the Chicago area and lows in the upper-30s in the Washington, D.C. area.
Forecasters are also looking at the possible formation of a late-season tropical storm in the Atlantic basin. The storm, if it forms, would be known as Tropical Storm Sandy and could accentuate the effects of colder weather next week.
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