US GAS: Futures End Higher On Rising Crude, Economic Data
11/03/2009 02:43PM
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HOUSTON (Dow Jones)--Natural gas futures ended higher amid rising crude-oil prices and positive economic data, despite forecasts of mild temperatures.
Natural gas for December delivery on the New York Mercantile Exchange settled 9.8 cents, or 2.03%, higher, at $4.922 a million British thermal units. The contract climbed as high as $4.94 in earlier trading.
Natural gas prices were given a lift Tuesday after the Commerce Department reported that U.S. factory goods orders rose 0.9% in September, marking the fifth increase in six months.
"Natural gas is partially up on oil and the factory numbers," said Pax Saunders, an analyst with Houston-based Gelber & Associates.
Analysts and traders have been closely monitoring economic data for signs that industrial demand for gas, which accounts for about a third of domestic consumption, is rebounding. Oil prices also edged higher Tuesday, providing some support for natural gas.
Natural gas will sometimes move in sympathy with oil and related products, which can act as a bellwether for the economy and overall energy demand.
Weather forecasts, however, were weighing on prices. The National Weather Service forecast for Nov. 8 to Nov. 12 calls for above-normal temperatures across the eastern half of the U.S., including key natural gas demand centers in the Northeast and Midwest.
Mild temperatures can stifle demand for the fuel and prolong the storage-injection season, adding more fuel to already record levels of natural gas in storage.
Natural gas in U.S. storage for the week ended Oct. 23 stood at an all-time high 3.759 trillion cubic feet--11% higher than last year and 12.4% above the five-year average. Storage levels are expected to near capacity of 3.9 trillion cubic feet before winter heating demand begins cutting into those supplies.
"There will be little rationale for buying without the appearance of a sudden arctic blast," wrote Mike Fitzpatrick, an analyst with MF Global in New York, adding that the National Weather Service "holds little hope for one."
-By Jason Womack, Dow Jones Newswires; 713-547-9201; jason.womack@dowjones.com