U.S. natgas futures edge higher as weather forecast turns colder
NEW YORK Nov 19 (Reuters) - U.S. natural gas futures edged higher on Tuesday as investors focused on forecasts for colder weather later this week and next week that should stir heating demand.
After a mild start to the week, forecaster MDA Weather Services in its six- to 10-day outlook expects below-normal or much below-normal temperatures to blanket states east of the Rocky Mountains.
At 9:10 a.m. EST (1410 GMT), front-month gas futures on the New York Mercantile Exchange were up 1.9 cents at $3.636 per million British thermal units after trading between $3.612 and $3.647.
The nearby contract finished up 2.8 percent last week, its second straight weekly gain following a 1.3 percent rise in the previous week. The contract hit a 3-1/2-week high of $3.705 on Monday before settling 1.2 percent lower.
Technical traders said the front month needed a close above resistance in the low-$3.70s to set the stage for more upside.
But with stockpiles at comfortable levels and production flowing at a record-high pace, many traders remain skeptical of further gains unless the cold weather is sustained.
Traders are expecting the season's first draw when the U.S. Energy Information Administration on Thursday releases its gas inventory report for the week ended Nov. 15. Estimates range from 15 billion to 42 billion cubic feet. That would compare with a 36 bcf draw in the year-earlier week and a five-year average draw of 2 bcf for that week.
EIA reported last week that total domestic gas inventories stood at 3.834 trillion cubic feet, just 2 percent below last year's record highs at that time, but 1.5 percent above the five-year average.