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Natural Gas Extends Gains
Forecasts for next 6 to 10 days call for colder-than-average weather in eastern U.S.
By NICOLE FRIEDMAN
Oct. 20, 2015 10:31 a.m. ET
http://www.wsj.com/articles/natural-gas-extends-gains-1445351488

NEW YORK--Natural gas prices continued to lift off of three-year lows Tuesday as traders bet that colder weather would limit the current oversupply of the fuel.

Natural gas futures for November delivery recently rose 4.2 cents, or 1.7%, to $2.484 a million British thermal units.

Prices fell to a three-year low Friday after inventory data showed that U.S. stockpiles of the fuel grew more than expected, indicating weaker demand or stronger production than analysts had anticipated.

Since then, forecasts have turned colder in the near term, boosting demand expectations. Cold weather adds to natural-gas consumption as more buildings use indoor heating.

Forecasts for the next six to 10 days are calling for colder-than-average weather in the eastern U.S., though temperatures are expected to moderate after that.

“Prices have been in a recovery mode...after a mini cold spell hit a portion of the U.S. over the last several days,” said Dominick Chirichella, analyst at the Energy Management Institute, in a note. However, he added, prices “should find limited support as the weather is expected to once again become unseasonably mild.”

Physical gas for next-day delivery at the Henry Hub in Louisiana last traded at $2.425/mmBtu, compared with Monday’s range of $2.38-$2.435. Cash prices at the Transco Z6 hub in New York last traded between $2.30 and $2.40/mmBtu, compared with Monday’s range of $2.40-$2.45.

Write to Nicole Friedman at [e-mail]