Natural-gas futures rose Friday, finishing at their highest level in nearly three months, as traders continued to look ahead to a projected increase in heating-fuel demand before the winter season.
Natural gas for November delivery gained 5.3 cents, or 1.4%, to $3.776 a million British thermal units on the New York Mercantile Exchange, reaching their highest settlement value since July 19.
Prices rose nearly 8% over the past five trading sessions and had their best week in about 11 months as weather forecasters said temperatures will soon drop in key regions of the country. The bullish outlook means that more Americans will likely burn natural gas in furnaces to heat homes, offices and other buildings in the near future.
Natural-gas futures "have moved up pretty aggressively all week as the market continues to price in winter risk," said Gene McGillian, a broker and analyst at Tradition Energy in Stamford, Conn.
In a research note, private forecaster MDA said, "significant cold changes are coming to much of the middle of the country as we head into the latter part October."
Meanwhile, forecasters at WSI said another "amplified cold trough" is likely to "dig across the eastern two thirds of the nation" over the next 11 to 15 days.
However, Mr. McGillian warned that if expectations for a spell of colder weather don't materialize, the recent rally "could sputter" as there is still a significant amount of gas in storage and production remains high.
In a weekly report released Thursday, the U.S. Energy Information Administration said natural-gas stockpiles in the week ended Oct. 4 rose by 90 billion cubic feet, less than the 94 bcf increase projected by analysts and traders.
Total inventories of 3.577 trillion cubic feet now stand at 3.7% less than the unusually high year-earlier level, but are 1.6% more than the five-year average level.
Jim Ritterbusch, president of energy-trading advisory firm Ritterbusch & Associates, said it appears "some bullish updates to the weekend temperature views will be required to extend this rally further."
