NYMEX November natural gas futures settled 1.4 cents higher at $3.859/MMBtu Friday as the market sought direction amid mild weather forecasts and the aftermath of another strong storage injection.
The prompt month traded in a tight, 5.5-cent range as the after-effects of a second triple-digit injection reported Thursday continued to weigh on the market, and some forecasts for late October turned warmer.
"We expect prices to rise in the next few days, but to be tempered by the warmer weather forecasts," said Gelber & Associates analyst Evans Finger.
"Weather models are forecasting warmer than normal temperatures for the rest of the month after a blast of cold in the next couple days," Finger said. "These warmer temperatures will help increase the total amount of gas in storage, with possibly two more triple digit injections expected in the coming weeks."
The US National Weather Service's eight- to 14-day forecast on Friday showed above-average temperatures are now likely across most of the US except for a bubble of average temperatures over part of the Southeast.
Finger noted that "more gas in storage means less of a chance for price spikes during the winter as concerns over lack of supply to meet heating demand are eased."
Even with overall strong injections this summer, "We're still below the five-year average" on total storage inventories, noted Phil Flynn, senior market analyst at Price Futures Group, and that is likely giving the market a little bit of strength. "It's just enough to keep us from falling as we wait to see what November weather will look like," he added.
"Until we get some real heating demand, or just any cold that will shake the market up, we're basically stuck in this trading range of about $3.80 to $4.10," said Gene McGillian, broker at TFS Energy Futures.
November traded Friday in a range of $3.833-$3.888/MMBtu.
The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (2300 GMT).
