US GAS: Cool Weather Outlook Lifts Futures

NEW YORK (Dow Jones) - Natural gas futures rose Friday, supported by expectations that cold weather felt in much of the northern U.S. could raise the demand for heating oil.
Natural gas for April delivery recently traded 2.5 cents, or 0.6% higher at $ 4269 a million British thermal units on the New York Mercantile Exchange.
Futures have finished higher in four of the last six sessions, supported by cold weather in much of the northern U.S. expected to remain in the next week.
The weather forecasts were little changed on Friday. The meteorologists at MDA EarthSat see cold in the northern U.S. until next week. Temperatures during the first days of April is expected to trend colder than normal in much of the Mid-Atlantic and Northeast, with temperatures warmer than normal in much of the Southwest, a private forecaster said.
The cold "increases the risk of another fall in storage" in the U.S. report next week on inventories, easing pressure on the market likely, said Jim Ritterbusch, president of Ritterbusch and Associates.
The gas market has been under pressure from the view that U.S. production will overwhelm demand this year, but the cold in early spring and the possibility of a late-season removal of the inventories of dealers has been a excuse to buy this week.
With the spring season of low demand shoulder ahead, analysts warn that further increases may be limited. the use of gas usually takes a season-low with mild temperatures in spring, before warm weather increases the demand for power generation gas power air conditioning.
"Over time, the calendar will make its way in time, both in terms of forecasts and actual temperatures," said Peter Beutel, president of energy consulting firm Cameron Hanover, in a note to clients.
Futures closed lower Thursday, as a retreat-expected weekly U.S. inventories provided an opportunity for traders to cash to take advantage of recent market developments. The Energy Information Administration reported that 6 billion cubic feet pulled out of storage last week, close to the consensus estimates for a project of 5 million cubic feet in a survey by Dow Jones Newswires.
Meanwhile, natural gas for delivery the next day at the benchmark Henry Hub in Louisiana recently traded at $ 4.19/MMBtu as IntercontinentalExchange, up 8 cents from the average on Thursday. Gas for delivery until Monday at Transcontinental Zone 6 in New York was quoted at $ 5.82/MMBtu, up 15 cents from the average on Thursday.

(Source: http://online.wsj.com/article/BT-CO-20110325-707404.html)