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January 2018 natural gas futures contract ends 5.6 cents higher

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January 2018 natural gas futures contract ends 5.6 cents higher

NYMEX January 2018 natural gas futures ended higher Monday, Dec. 11, rising more than 5 cents, with gains driven by technical buying amid oversold conditions and solid weather-side support. Trading from $2.793/MMBtu to $2.848/MMBtu on the session, front-month January 2018 natural gas settled at $2.828/MMBtu, up 5.6 cents.

From Dec. 1-8, January 2018 gas unwound 28.9 cents in value, which sparked bargain buying in the Monday session.

Additionally working to goose the natural gas market to the upside Monday were revised weather forecasts. According to the National Weather Service, for the six- to 10-day period, normal to colder-than-normal winter weather is likely in store for the major heat-consuming portions of the East that should keep natural gas demand for heating elevated across the area.

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In the agency's eight- to 14-day forecast, normal to below-normal temperatures are likely to encompass the Northeast, mid-Atlantic and areas of the east-north-central U.S. Above-normal temperatures are expected across the rest of the country through the extended period.

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Recent cold weather and the extended cold forecast for portions of the East should bolster demand for natural gas and allow for a withdrawal from storage in the coming weeks.

Current outlooks for the next storage report due out from the U.S. Energy Information Administration on Dec. 14, which will cover data for the weekly period ended Dec. 8, are likely to detail a below-average pull, anywhere from the high 40s Bcf to the low 60s Bcf. The figure will compare to the year-ago pull of 132 Bcf and the five-year average withdrawal of 78 Bcf.

For the week ended Dec. 1, the EIA reported a surprise 2-Bcf injection into storage, which marked the first net addition into storage during the month of December since 2012. The figure came in well above the 69-Bcf five-year average withdrawal and a 43-Bcf pull in the corresponding week in 2016. Total working gas stocks currently sit at 3,695 Bcf, or 264 Bcf below the year-ago level and 36 Bcf below the five-year average of 3,731 Bcf.

Meanwhile, the EIA's latest "Natural Gas Weekly Update" for the week ended Dec. 6, much of which will be reflected in the next storage report that will cover the week to Dec. 8, shows total U.S. gas consumption was 8% higher week on week amid stronger consumption across major sectors, while dry production was down 1% over the same period.

Cash natural gas prices were generally aimed higher Monday, in step with the session's strength in futures. Gains ranged from 5 cents to 25 cents on average.

At Tetco M3, gas for Tuesday flow saw an index near $3.05/MMBtu, increasing 10 cents. However, at Transco Zone 6 NY in the north, spot gas posted an index near $3.75/MMBtu, down 40 cents on the day.

In the producing region at the benchmark Henry Hub market, spot gas was priced around $2.80/MMBtu, for a daily gain of about 5 cents. Waha next-day product came in atop $2.55/MMBtu, up 1 cent.

Chicago cash gas was seen at an average around $2.80/MMBtu, rising about 15 cents on the day. Cash gas at Demarc was marked around $2.70/MMBtu, also gaining about 15 cents on the day.

On the West Coast, gas for Tuesday delivery at PG&E Gate was priced at an average atop $2.95/MMBtu, up about 10 cents. Product at the SoCal Border was eyed at about $3.00/MMBtu, gaining 25 cents.

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.