Natural Gas Rises to Seven-Week High on Colder Weather Forecast

March 25 (Bloomberg) - Natural gas futures rose to its highest level in more than seven weeks as the weather forecasts show a colder than normal, increasing the demand for heating oil.
Oil rose for a third week as the Climate Prediction Center weather colder than normal for the eastern U.S. 30 March to 7 April. The low temperature in New York will be 26 degrees Fahrenheit (3 degrees Celsius) tomorrow, 12 degrees below normal, according to AccuWeather Inc. in State College, Pennsylvania.
"You have cold weather throughout next week on the East Coast and traders are not willing to go short over the weekend," said Hamza Khan, an analyst of Schork Group Inc., a consulting firm Villanova, Pennsylvania.
Natural gas for April delivery advanced 15.9 cents, or 3.8 percent, to 4. $ 403 per million British thermal units on the New York Mercantile Exchange, the highest close since 02 February. Future growth of 5.6 percent this week. The April contract expires on March 29.
gas gains accelerated in the last 30 minutes of trading, with prices rising less than $ 4.30 to over $ 4.40.
"Apparently, some traders decided to go long in the final minutes, and it will be cold next week," said James Williams, an economist at WTRG Economics, an energy research firm in London, Arkansas. "Some operators are also likely to buy contracts to cover their short positions before the contract expires."
April Showers
A series of storms extending through April is making it harder for the computer prediction models to determine how cold the eastern U.S. that, Matt Rogers, president of matter Time Group LLC, said in a note to clients today.
GTC forecast from from March 30 to April 3 said it was likely that an area of ​​below-normal temperatures will develop in the Northeast and Ohio Valley and again in Illinois and Missouri.
U.S. heating demand will be 19 percent higher than the average from 1 April morning, according to Weather Derivatives in Belton, Missouri.
About 52 percent of U.S. households the use of natural gas for heating, according to the Department of Energy.
Oil also gained as data showed the U.S. economy is improving, according to Williams.
Economic Growth
Gross domestic product grew at a rate of 3.1 percent annually in the fourth quarter, compared with an estimate of 2.8 percent issued last month, the Commerce Department figures showed today in Washington.
The number of gas rigs rose this week after falling to its lowest level since January 29, 2010 in the previous week.
The number of teams increased 5 to 880, Houston-based Baker Hughes Inc. reported today.
U.S. gas inventories down 6000 million cubic feet in the week ending 18-1,612,000,000,000 cubic feet, the Energy Department reported yesterday.
The decline in stocks was smaller than the average five-year retirement for the week of 17 billion cubic feet, the data show department. A surplus with the average of five years rose to 2.2 percent from 1.4 percent the previous week.
U.S. gas production advanced 1.1 percent in December from November, according to Energy Department's monthly EIA-914 report. Production in the 48 states rose for the second consecutive month, rising 0.2 percent to 66.76 billion cubic feet a day from a revised 66600000000.
The department will release a new report from EIA-914 on March 29, covering January production levels.
Volume of gas futures in electronic trading on the Nymex was 259.726 as of 14:56, compared with three-month average of 307,000. Volume was 408,591 yesterday. The open interest was 887,596 contracts. The three-month average open interest of 878,000.

(Source: http://www.businessweek.com/news/2011-03-25/natural-gas-rises-to-seven-week-high-on-colder-weather-forecast.html)