Cold forecasts back U.S. natgas futures gains for 3rd day
NEW YORK Nov 22 (Reuters) - U.S. natural gas futures edged higher for a third straight day on Friday, with the front-month contract posting a fresh one-month high in the face of cold weather forecasts for late this week and next week that should lift demand for heating.
MDA Weather Services expected mostly cold temperatures to stretch across the eastern two-thirds of the country for the next two weeks, with only a slight moderation in the outlook late in the period.
At 9:05 a.m. EST (1405 GMT), front-month gas futures were up 6.3 cents, or 1.7 percent, at $3.765 per million British thermal units on the New York Mercantile Exchange after climbing early to a one-month high of $3.775.
The nearby contract is up about 2.9 percent so far this week after gaining 4.2 percent in the previous two weeks.
Chart watchers, noting the market was still trading 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.
With stockpiles at comfortable levels and production flowing at a record-high pace, many traders expected limited upside from here unless the cold weather is sustained.
Most traders viewed Thursday's 45-billion-cubic-foot weekly natural gas inventory draw as bullish for prices, noting it came in well above the Reuters poll estimate of 33 bcf and also exceeded the highest estimate of 42 bcf in that poll.
The data reported by the U.S. Energy Information Administration (EIA) showed total domestic gas inventories of 3.789 trillion cubic feet, just 2.3 percent below last year's record highs at that time, but still 0.4 percent above the five-year average.
Early withdrawal estimates for next week's storage report ranged from 2 bcf to 4 bcf. That would compare with a 2 bcf drop during the same year-ago week and a five-year average decline of 15 bcf for that week. Continued...