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Natural gas futures fluctuate amid uncertain demand outlook

Published 10/11/2011, 11:55 AM
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Investing.com – Natural gas futures fluctuated between modest gains and losses on Tuesday, but remained closed to the previous session’s 11-month low as an uncertain U.S. demand outlook weighed.
 
On the New York Mercantile Exchange, natural gas futures for November delivery traded at USD3.543 per million British thermal units during U.S. morning trade, easing up 0.07%.

The November contract traded between a range of USD3.513, the daily low and USD3.587, the daily high and the highest since October 7.

Natural gas prices touched USD3.454 per million British thermal units on Monday, the lowest since October 21, 2010.

After a warmer-than-normal start to October, forecasters are now projecting cooler temperatures over the next two weeks, particularly across the northern U.S. states.

The Commodity Weather Group said earlier that the U.S. Northeast may cool just enough to produce “above-normal” demand for natural gas during the next two weeks.

In the firm’s 11-to-15 day weather outlook, CWG said that the mid-Atlantic and Northeast U.S. states will be cooler-than-normal until October 25.

“This should provide above-normal early season heating demand, but no major chill is expected,” the weather group said in a report.

However, prices failed to jump higher as the U.S. National Weather Service forecast temperatures in the U.S. Southwest will be about 3 degrees Fahrenheit (1.6 Celsius) warmer-than-normal through October 16.

Natural-gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late-September and October on heating demand.

Demand is typically low in the so-called autumn "shoulder season," the period after consumers shut off air conditioning but before heating kicks in.

Elsewhere on the Nymex, light sweet crude oil futures for delivery in November slipped 0.1% to trade at USD85.33 a barrel, while heating oil for November delivery edged 0.11% lower to trade at USD2.900 per gallon.


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