The NYMEX September natural gas futures contract settled at $2.796/MMBtu, up 3.5 cents, further extending this week's rally as prices rose on bullish weather forecasts and expectations for another below-average weekly build to gas storage stocks.
Wednesday's increase marked the third consecutive positive settlement and the eighth out of nine trading days that the contract settled higher.
"Coming into this week it looked as though the weather forecast changed to put some heat back in the country for the last two weeks of August. The market has taken that as a sign we could see a correction ... . Looks as if maybe the rush to shoulder season seems to have taken a back seat to tighter fundamentals," said Tradition Energy senior analyst Gene McGillian.
Since falling to $2.551/MMBtu August 11, the prompt contract has rallied 24.5 cents. The September contract is set to expire next Monday.
The US National Weather Service's latest six- to 10-day outlook, issued Wednesday afternoon, continued to call for above-average temperatures across much of the continental US.
Similar conditions also were expected in the eight- to 14-day range.
The rise in the prompt contract also comes as a consensus of analysts surveyed by Platts expects the US Energy Information Administration to report a natural gas storage injection of around 18 Bcf Thursday. An injection at that level would be well below both the 66-Bcf injection reported for the same week last year as well as the 63-Bcf five-year average storage build.
The September contract traded in a range between $2.749/MMBtu and $2.819/MMBtu.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
