The NYMEX October natural gas futures contract continued to rally midday Tuesday, trading 5.8 cents higher at $2.857/MMBtu as of 12:49 p.m. EDT (1649 GMT), on post-Isaac production shut-ins and warm weather in the forecasts.
This week, the weather forecasts show 36% higher temperatures than year-ago levels and 24% above the long-term average, which is "slightly bullish" for gas prices, Canaccord Genuity analysts said.
In addition, lingering effects of Hurricane Isaac "should give the market a leftover boost" from shutdown of the Sabine Pipe Line's Sea Robin/Henry Hub interconnection last week, ICAP Energy Vice President Drew Wozniak said.
According to TFS Energy Futures trader Gene McGillian, the market has rebounded 30 cents in the last three days because of around 1.5 Bcf of production shut-ins following Hurricane Isaac and some short covering in anticipation of stronger cooling needs in the coming week.
The contract has traded so far Tuesday in a range between $2.762/MMBtu-$2.888/MMBtu.
