Cold temps drive U.S. natgas futures up, front hits 4-wk high
NEW YORK Nov 21 (Reuters) - U.S. natural gas futures edged higher for a second straight day on Thursday, with the front-month contract posting a four-week high in the face of cold weather forecasts for later this week and next week that should lift demand for space heating.
MDA Weather Services expects strong cold to spread across the eastern two-thirds of the country over the next 10 days, with only a slight moderation in the temperature outlook in its 11- to 15-day forecast.
At 9 a.m. EST (1400 GMT), front-month gas futures on the New York Mercantile Exchange were up 3.4 cents, or 0.9 percent, at $3.708 per million British thermal units after climbing early to a four-week high of $3.712.
The nearby contract, which gained 4.2 percent in the previous two weeks, is up 1.3 percent so far this week.
Technical traders, noting the market seemed stuck in a range between the $3.50s and $3.70s, said the front month needed to 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 expect only limited upside from here unless the cold weather is sustained.
Traders and analysts polled by Reuters on average expect a withdrawal of 33 billion cubic feet when the U.S. Energy Information Administration on Thursday releases its weekly storage report. It would be the season's first inventory draw.
That would compare with a 36 bcf decline in the year-earlier week and a five-year average drop of 2 bcf for that week.
EIA data last week showed total gas inventories had climbed to 3.834 trillion cubic feet, about 2 percent below last year's record highs at that time, but 1.5 percent above average. Continued...