Natural gas futures were up for a second day on Tuesday, climbing to a one-week high boosted by weather forecasts that are likely to lift demand for the fuel.
The rise followed an 8.1-cent gain Monday, with the combined increase nearly erasing the loss of 12.8 cents over four days last week, when prices settled at their lowest level since Oct. 27.
The back-to-back gains were the first since mid-month, when gas last topped the $4 level. That key area was reached as storms temporarily disrupted much of the output in the U.S. Gulf. But prices remain far from that mark, with the peak of hurricane season past and no current threat to production facilities brewing.
On the New York Mercantile Exchange, natural gas futures for November delivery traded at USD3.890 per million British thermal units during U.S. morning trade, climbing 1.18%.
It earlier rose as much as 2.2% to trade at USD3.925 per million British thermal units, the highest price since September 20. Gas futures have already fallen sharply from their summer highs. The contract peaked for the year at nearly $5 per million Btu in June, and hasn’t traded above $4 since Sept. 14.
Industry weather group MDA Federal said earlier that it forecast cooler-than-normal temperatures across the eastern U.S. states through the first week of October before warming up again later in the month.
Low temperatures in the large Northeastern cities will probably hover in the 40-degree to 50-degree Fahrenheit (4 to 10 Celsius) range during the period.
‘The chill will slowly fade as the period moves on, though most areas should stay below normal,’ according to forecasters.
Meanwhile, the Commodity Weather Group said that warmer-than-normal temperatures are expected across the Southern U.S. states, specifically centered around Texas for the next six to 10 days, which should trigger some late-season cooling demand.
“It is difficult to say how bullish the temperature forecasts really are going to be, but after falling consistently, this market was apparently ripe for any bullish hand to take a turn at the price tiller,” Peter Beutel, president of Cameron Hanover, said in a research note. “We have plenty of natural gas in storage right now and with the shoulder months right in front of us, it seems unlikely that we should see any major consumption ahead of us until the middle part of December.”
Forecasts aren’t always reliable, but when it comes to your business’ electricity rates, you don’t have to take that risk. At Live Energy, we keep our finger on the market’s pulse—locking in a low rate with the right electricity provider has never been easier. For more information on how we can help you find the right electricity plan for your business, contact us at (877) 810-7770 today.
Commodity Prices ($)