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December natural gas futures extend gains ahead of expiration

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December natural gas futures extend gains ahead of expiration

Ending the prior trading day more than 11 cents higher, NYMEX December natural gas futures were extending those gains into the Tuesday, Nov. 28, session ahead of the contract's afternoon expiration.

At 7:10 a.m. ET, the December gas futures contract was up 4.6 cents to $2.974/MMBtu. January 2018 natural gas futures gained 4.3 cents to $3.060/MMBtu.

Increasingly colder weather is on the horizon as the calendar officially turns to winter shortly, which should lead to larger gas storage withdrawals in the weeks ahead, a factor that is also buoying natural gas futures prices.

Outlooks from market analysts and traders for the upcoming natural gas storage report that will cover the week ended Nov. 24 are presently calling for an average pull in the mid-40s Bcf. The latest figure will compare to a 43-Bcf year-ago pull and the 47-Bcf five-year average withdrawal.

For the week ended Nov. 17, the U.S. Energy Information Administration reported a net 46 Bcf was pulled from storage, leaving total U.S. working gas at 3,726 Bcf, or 319 Bcf below the year-ago level and 121 Bcf below the five-year average of 3,847 Bcf.

Looking at the weather, for the six- to 10-day period, the National Weather Service expects above-average readings across the entire eastern two-thirds of the country and in regions of the Rockies. Normal to below-normal temperatures are projected for the West Coast.

Normal to above-average temperatures are eyed for much of the country in the agency's eight- to 14-day forecast, including fringes of the central U.S. Below-average readings are seen for the West, a majority of the south-central U.S and Texas through the extended period.

At the cash markets, next-day prices for natural gas at the major U.S. consuming hubs were mixed to lower to kick off the new week Nov. 27.

At the key delivery locations, spot gas at the benchmark Henry Hub location in Louisiana was down about 12 cents to an index just shy of $2.90/MMBtu.

In the Northeast at the Transco Zone 6 hub, day-ahead product was down 25 cents in value to an average at around $2.75/MMBtu. In the Midwest, gas at Chicago was priced at $2.70/MMBtu, easing almost 15 cents. Next-day product at PG&E Gate on the West Coast ran about 7 cents higher to an index of $3.05/MMBtu.

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Regionally, West Coast spot gas prices advanced nearly 14 cents to an index of $2.51/MMBtu to start the fresh week. Northeast day-ahead gas fell nearly 16 cents to an average of $2.74/MMBtu, while Midwest day-ahead gas pricing lost more than 7 cents to an index of $2.60/MMBtu. Day-ahead gas at the Gulf Coast posted an index at about $2.74/MMBtu, down 10 cents.

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Market prices and included industry data are current as of the time of publication and are subject to change. For more detailed market data, including power and natural gas index prices, as well as forwards and futures, visit our Commodities pages.