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Natural gas futures - weekly outlook: December 2 - 6

Published 12/01/2013, 10:46 AM
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Investing.com - Natural gas futures rallied to a five-month high on Friday, as updated weather forecasting models continued to point to colder than average temperatures in key gas-consuming regions in the U.S.

On the New York Mercantile Exchange, natural gas futures for delivery in January jumped 1.51% on Friday to settle the week at USD3.954 per million British thermal units.

Nymex gas prices rallied to a session high of USD3.962 per million British thermal units earlier, the strongest level since June 20.

Nymex floor trading remained closed on Thursday for the Thanksgiving Day holiday in the U.S.

The January contract settled 0.8% higher on Wednesday to end at USD3.895 per million British thermal units.

Natural gas futures were likely to find support at USD3.873 per million British thermal units, the low from November 29 and resistance at USD3.982, the high from June 19.

On the week, January natural gas prices rose 3.61%, the fourth consecutive weekly gain.

For November, Nymex natural gas futures saw a 9.2% monthly advance, as bullish speculators bet that colder weather will increase demand for the heating fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption.

Updated weather forecasting models called for chilly temperatures across most parts of the eastern half of the U.S. during the next two weeks.

Industry weather group MDA Federal said it expected a "broad cold pattern" across most parts of the U.S. in its 11-to-15 day forecast.

Upward momentum from Wednesday’s bullish U.S. supply data further boosted prices.

The Energy Information Administration said that natural gas storage in the U.S. fell by 13 billion cubic feet, compared to expectations for a withdrawal of 10 billion cubic feet.

Inventories fell by 2 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 15 billion cubic feet.

Total U.S. natural gas storage stood at 3.776 trillion cubic feet as last week, 2.6% below last year's unusually high level but 0.5% above the five-year average for this time of year.

Elsewhere in the energy complex, light sweet crude oil futures for January delivery settled at USD92.78 a barrel by close of trade on Friday, down 2.23% on the week.

Meanwhile, heating oil for January delivery inched up 0.23% on the week to settle at USD3.032 per gallon by close of trade Friday.

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