Houston — A bullish weather forecast for much of the US provided a boost for gasfutures coming out of the four-day Thanksgiving holiday, with NYMEX December settling Monday at $2.928/MMBtu, up 11.5 cents from Friday's close.
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At the same time, the January contract rose 10.1 cents to settle at$3.017/MMBtu.
Phil Flynn, senior market analyst at Price Futures Group, said the pricejump was largely related to a change in the long-term weather forecast.
"Well, what happened is that on Friday the weather forecast changed,"Flynn said. "We had been expecting warmer weather throughout December, but nowit's looking like it's going to be a little colder in late December.
"It's really kind of amazing how often the weather forecast changes. Wewere looking at global warming, now it seems that winter is making acomeback."
According to the US National Weather Service, the forecast for Decembercalls for colder-than-normal weather for much of the northern US, particularlyin the major demand areas of the Northeast, Midwest and Northwest, and near-to slightly above-normal temperatures in the southern US.
With the weather outlook providing support, Flynn also said that with thecalendar closing in on December, trading action is moving to the Januarycontract, boosting both.
"The rise [in the front-month contract] is also related to the fact thatwe are in that rollover period, where people are starting to trade forJanuary," he said.
Production looked to remain steady Tuesday, with Platts Analytics' BentekEnergy data at 76.7 Bcf/d, near the seven-day average of 76.69 Bcf/d.
"Production is strong right now and not because people necessarily neednatural gas," Flynn said. "It's indicative of the higher oil rig count and theassociated gas that comes with those rigs."
The NYMEX settlement price is considered preliminary and subject tochange until a final settlement price is posted at 7 pm EST (2400 GMT).
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