Natural-gas futures on Friday climbed to a 19-week high in New York on forecasts for a polar blast extending across the central and eastern U.S., spurring demand for the heating fuel.
A midday update to the government’s Global Forecast System weather model showed temperatures as much as 15 degrees below normal along a wide swath of the country Nov. 17-21. The low in Minneapolis on Nov. 18 may be 12 degrees, 13 less than usual, data from AccuWeather Inc. show.
“The forecasts have gotten pretty chilly,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “If the frigid weather actually starts to materialize, prices will take another leg higher because of the implied heating demand and the impact on storage.”
Natural gas for December delivery rose 4.6 cents, or 1 percent, to $4.45 per million British thermal units on the New York Mercantile Exchange. Gas advanced to $4.494 per million Btu in intraday trading, the highest since June 26. Futures have climbed 14 percent this week, the most since the seven days ended Feb. 21. Volume for all futures traded was more than double the 100-day average.
The noon weather model update was “off-the-charts colder” than the morning outlook, Steve Silver, a meteorologist at MDA Weather Services in Gaithersburg, Md., said in a note to clients Friday.
Gas inventories totaled 3.571 trillion cubic feet as of Oct. 31, compared with 3.809 trillion at the same time last year, EIA data show. Demand for the fuel may climb 1.6 percent to average 72.5 billion cubic feet a day this year, with the industrial sector leading growth, the agency said Oct.7 in its monthly Short-Term Energy Outlook report.
