U.S. natgas futures edge up for 3rd day with colder temps ahead
NEW YORK Nov 18 (Reuters) - U.S. natural gas futures edged higher for a third straight day on Monday, as investors focused on cold weather forecasts for this week and next week that should stir more heating demand.
After another day or two of mild weather, private forecaster MDA Weather Services expects mostly below-normal temperatures to dominate the eastern two-thirds of the nation in its six- to 15-day outlook.
At 9:15 a.m. EST (1415 GMT), front-month gas futures were up 3.3 cents, or 0.9 percent, at $3.693 per million British thermal units on the New York Mercantile Exchange after trading between $3.673 and $3.705.
The nearby contract finished up 2.8 percent last week for its second straight weekly gain, following a 1.3 percent rise in the previous week. The combined run-up of 4.2 percent since Nov. 1 was the biggest two-week climb in four weeks.
Technical traders noted that front-month futures gapped higher today, posting a 3-1/2-week high of $3.705, which could signal a break to the upside if the market closes higher.
But with stockpiles at comfortable levels and production flowing at a record-high pace, many traders remained skeptical of further price gains unless the cold is sustained.
With over a billion cubic feet per day of new gas flowing from Marcellus shale this month and more supply likely coming, many traders agreed that temperatures this winter will have to stay cold if prices are to avoid testing the $3 mark.
Early withdrawal estimates for the inventory report on Thursday ranged from 15 billion to 41 billion cubic feet. That would compare with a 36 bcf decline in the year-earlier week and a five-year average draw of 2 bcf for that week.
Data reported by the U.S. Energy Information Administration last week showed that total domestic gas inventories of 3.834 trillion cubic feet were just 2 percent below last year's record highs at that time but 1.5 percent above the five-year average. Continued...