Investing.com – Natural gas prices rose on Monday after updated weather-forecasting models pointed to falling temperatures across the U.S., which should drive demand for heating in the country’s homes and businesses.
Natural gas futures rise on forecasts for cooler U.S. mercury readings
On the New York Mercantile Exchange, natural gas futures for delivery in November were up 1.68% at $4.097 per million British thermal units during U.S. trading. The commodity hit a session low of $4.012, and a high of $4.098.
The November contract settled up 0.37% on Friday to end at $4.029 per million British thermal units.
Natural gas futures were likely to find support at $3.845 per million British thermal units, last Tuesday’s low, and resistance at $4.100, the high from Sept. 17.
Weather-forecasting models called for cooler temperatures in the Midwest and eastern U.S. later this week and extending into the middle of October, though some backed off intensity, which capped the commodity’s gains.
“There will be a series of reinforcing cool blasts and weather systems that will sweep through, although timing each one more than a week out is tricky, especially in determining exactly how cold each one will be and also how far into the U.S. they will advance,” Natgasweather.com reported in its midday update for Monday.
“But the fact the jet stream will be dipping over the northeastern U.S. should be at least somewhat concerning to the nat gas markets. There are still ways the pattern could play out warmer, especially over the eastern U.S. coastline.”
Natural gas prices received an additional boost from the rollover to the November contract, after the October contract expired on Friday.
Natural gas futures have repeatedly tested the $4 level this month ahead of the approaching peak winter home-heating demand season.
Extreme cold in the eastern U.S. last winter saw natural gas prices rise above the $6 per million British thermal units level and reduced inventories to their lowest levels in 11 years in the early part of this year.
Since then, suppliers have been rapidly rebuilding storage levels amid a boom in domestic shale gas production.
The U.S. Energy Information Administration said in its report last week that natural gas storage in the U.S. rose by 97 billion cubic feet in the week ended Sept. 19, up from 90 billion in the previous week and ahead of expectations of 93 billion cubic feet.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in November were up 0.78% at $94.27 a barrel, while heating oil for November delivery were up 0.39% at $2.7129 per gallon.