Nymex Natural Gas Rises to 8-Week High on Buying for Winter

Natural Gas and Oil

By Geoffrey Smith Oct. 20 (Bloomberg) -- Natural gas rose to an eight-weekhigh on expectations that cold weather this winter will boostdemand for the furnace fuel and cut down a glut of gas ininventories. Forecaster AccuWeather Inc. has said winter will be colderthan government meteorologists are predicting, especially acrossthe eastern U.S. Early season cold the past couple of weeks inthe central part of the country has stoked fears that colder-than-average weather may carry into winter. ``If you get even an average winter, you can blow throughinventories pretty quickly,'' said Jason Schenker, an economistwith Wachovia Corp. in Charlotte, North Carolina. ``We might haveseen the bottom'' in prices, he said. Gas for November delivery climbed 12.1 cents, or 1.7percent, to $7.253 per million British thermal units at the 2:30p.m. close of floor trading on the New York Mercantile Exchange.The price has jumped 28 percent this week, vying for the biggestweekly surge since futures trading began in 1990. Prices soared29 percent in the weeks ended Dec. 8, 2000, and Oct. 26, 1990. U.S. weather was 17 percent cooler than normal in the weekended Oct. 14, according to population-weighted data from theNational Oceanic and Atmospheric Administration. The NorthernPlains, a region that includes the Dakotas, Nebraska, Kansas,Missouri, Iowa and Minnesota, had weather that was 54 percentcooler than the norm, the government data showed. The trend in gas prices is up, according to analysis fromGuy Gleichmann, president of United Strategic Investors Group inHollywood, Florida. The seasonal pattern is for prices to rallyinto the start of winter, he said. ``You have a shift in sentiment where people are starting tolean to the long side,'' Gleichmann said. ``This surplus can geteradicated very quickly.'' Gas will gravitate toward $7.80 before sellers step in toreverse the trend, he said. ``Next resistance is $7.80, whichNovember may make a run at'' next week, Gleichmann said.--Editor: Jordan.Story illustration: To graph the front-month Nymex gas contract,see {NG1 <Cmdty> GP D <GO>}. For other energy-related news, click{ETOP <GO>}.To contact the reporter on this story:

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10-20-2006 / 14:36 (New York)

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Nymex Natural Gas Rises to 8-Week High on Buying for Winter.

Natural Gas and Oil

United Strategic Investors Group