Natural gas futures rose for the first time in four days, reducing a weekly loss on signs that the U.S. economic recovery is strengthening.
Gas advanced after the index of U.S. leading economic indicators increased in November by the most in eight months. Prices were lower earlier as forecasts by the
National Weather Service showed temperatures will be in a normal range in the U.S. Northeast from Dec. 24 to Dec. 30.
“Gas should be moving higher with the economy,” said
Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “It looks like maybe we are going to have some more moderate weather, but it’s still winter and it’s cold. What we are seeing today is maybe the final gasp of long liquidation.”
Natural gas for January delivery rose 1.8 cents, or 0.4 percent, to settle at $4.066 per million British thermal units on the New York Mercantile Exchange. Gas fell 8 percent this week, the most since Aug. 27.
“Gas prices have fallen as far as they are likely to on this decline, and we should see the cold-weather dynamics return to the fore in this market,” Beutel said.
The Conference Board’s gauge of the economic outlook for the next three to six months rose 1.1 percent, the New York- based group said today.
‘Some Strength’
“Data are showing some strength in the economy,” said
Cameron Horwitz, an analyst in Houston at Canaccord Genuity. A stronger economy “is certainly supportive in terms of the industrial gas demand side.”
There will be “a slow transition to a warmer” weather pattern in the U.S. in the 11- to 15-day forecast, according to MDA Federal Inc.’s EarthSat Energy Weather in Rockville, Maryland.
New York will have a high of 38 degrees Fahrenheit (3 degrees Celsius) on Dec. 30, 1 degree below normal, according to
AccuWeather Inc. in State College, Pennsylvania. Boston will have a high of 30 degrees.
About 52 percent of U.S. households use natural gas for heating, according to the Energy Department.
Gas stockpiles slipped 164 billion cubic feet in the week ended Dec. 10 to 3.561 trillion cubic feet, the Energy Department reported yesterday. Analysts had estimated a drop of 165 billion. Inventories were 9.9 percent above five-year average.
’Not Remarkable’
“On a weather-adjusted basis, the storage withdrawal was not remarkable, continuing the trend so far this season,”
James R. Crandell, an analyst with Barclays Capital in New York, said in a note to clients today.
Gas stockpiles will total 1.833 trillion cubic feet at the end of the winter heating season in March, about 171 billion cubic feet higher than at the end of March 2010, the Energy Department said on Dec. 7 in its monthly Short-Term Energy Outlook report.
Wholesale natural gas at the benchmark Henry Hub in Erath, Louisiana, fell for a fourth day by 20.08 cents, or 4.8 percent, to $3.993 per million Btu on the Intercontinental Exchange.
Gas futures volume in electronic trading on the Nymex was 248,042 as of 2:50 p.m., compared with the three-month average of 284,000. Volume was 378,837 yesterday. Open interest was 792,270 contracts, compared with the three-month average of 790,000. The exchange has a one-business-day delay in reporting open interest and full volume data.