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.
Baker Hughes data on Friday showed the gas drilling rig count rose last week for the fourth time in five weeks, gaining five to 370.
The gas rig count has risen in 13 of the last 21 weeks, stirring talk that new pipelines and processing plants, particularly in the Northeast, may be encouraging producers to hook up more wells and pump more gas into an already well-supplied market.
The EIA on Wednesday raised its estimate for domestic natural gas production in 2014, forecasting output up more than 1 percent from record-high levels in 2013.
Nuclear plant outages on Monday totaled 10,665 megawatts, or about 11 percent of U.S. capacity. That was down from Friday’s total of 11,202 MW and well below the 26,116 MW out one year ago and the five-year average outage rate of 18,121 MW.