UPDATE 3-U.S. natgas futures gain 8 pct this week in technical rally

Fri Oct 11, 2013 3:17pm EDT
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* Cooler weather on tap in long-term outlooks

* Prices remain above key technical resistance levels

* Tropical low in Atlantic basin could become cyclone soon

By Eileen Houlihan

NEW YORK, Oct 11 (Reuters) - U.S. natural gas futures rose more than 1 percent on Friday and nearly 8 percent this week, lifted by continued technical buying and short-covering ahead of cooler weather expected later this month.

"Weather forecasts after the next five days of above-normal temperatures in the eastern half of the country have shifted colder in the central part of the U.S., from Texas northward into the upper Midwest and to below- to well-below normal temperatures in the six- to 10-day period," said Addison Armstrong, senior director of market research at Tradition Energy in Stamford, Connecticut.

The nearby contract garnered momentum from the cooler-trending weather forecasts as well as offshore Gulf of Mexico production cuts from Tropical Storm Karen last week and over the weekend.

Front-month November natural gas futures on the New York Mercantile Exchange rose 5.3 cents, or 1.42 percent, to settle at $3.776 per million British thermal units.

The contract rose as high as $3.795 on Thursday after breaking through technical resistance at the 100-day and 200-day moving averages over the past several days. But prices remain slightly below the two-month high of $3.82 hit three weeks ago.   Continued...