Nymex Natural Gas Surges On Forecasts for Cold Weather

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Natural gas rose the most since July in New York as forecasters predicted cooler weather in the Midwest will lift consumption of the furnace fuel.

Demand for heat will top normal by 18% over the next seven days in the northern Midwest, according to researcher Weather Derivatives in Belton, Missouri. Cool temperatures this time of year cause residences and businesses to turn on furnaces left idle since last winter. “If this is a harbinger of November weather, and this cold weather persists, then we probably have seen the bottom” in prices, the director of fundamental futures research at A.G. Edwards & Sons Inc. in St. Louis, Bill O’Grady, said.

Gas for November delivery climbed 55.5 cents, or 9.8%,to $6.214 per million British thermal units at 1:18 p.m. on the New York Mercantile Exchange, the biggest single-session rally since July 31. Gas rebounded after dropping 12% the past three trading days.

Chicago’s overnight low will touch 39 degrees Fahrenheit by October 19, down from 50 today and a seasonal average of 42, according to the National Weather Service. Lower-than-normal temperatures were predicted to cover most of the country next week, according to an outlook from government forecasters that covers October 21 through 25. The forecast predicts the coldest temperatures will hit the northern Plains and Midwest.

Gas demand peaks during the coldest months of the year as more of the fuel is used in furnaces. The Midwest is the biggest market in America.


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