Investing.com - Natural gas prices shot up on Friday on expectations that a blast of colder weather making its way across the U.S. will drive demand for heating and prompt thermal power producers to burn more of the commodity to meet demand.
On the New York Mercantile Exchange, natural gas futures for delivery in December were up 1.82% at $3.897 per million British thermal units during U.S. trading. The commodity hit a session low of $3.836, and a high of $3.955.
The December contract settled up 1.03% on Thursday to end at $3.827 per million British thermal units.
Natural gas futures were likely to find support at $3.620 per million British thermal units, Tuesday's low, and resistance at $4.184, the high from Oct. 1.
A strong cold front is pushing deep into the eastern U.S. and will bring temperatures 10-20F colder than normal over many regions, which should drive demand for heating even in the otherwise warmer Southeast, where temperatures could dip into the mid 30s.
While milder temperatures will return, reinforcing blasts of cold air could sustain demand for heating, which sparked a rally in natural gas markets.
"Next week will bring a milder pattern to much of the U.S., but it won't be perfect as there will still be chilly Canadian weather systems tracking across the far northern U.S., particularly late in the week for the upper Midwest and the Northeast," Natgasweather.com reported in its Friday midday update.
"There will also be a slow moving mild weather system over Texas that will bring showers and slightly cooler than normal temperatures."
The heating season from November through March is the peak demand period for U.S. gas consumption.
Investors continued to digest Thursday's weekly inventory data.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending Oct. 24 rose by 87 billion cubic feet, above expectations for an increase of 85 billion and compared to a gain of 94 billion in the previous week.
Inventories rose by 45 billion cubic feet in the same week a year earlier, while the five-year average change is a build of 59 billion cubic feet.
Injections of gas into storage have surpassed the five-year average for 28 consecutive weeks, alleviating concerns over tightening supplies.
Total U.S. natural gas storage stood at 3.480 trillion cubic feet. Stocks were 294 billion cubic feet less than last year at this time and 310 billion cubic feet below the five-year average of 3.790 trillion cubic feet for this time of year.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in December were down 1.00% at $80.31 a barrel, while heating oil for December delivery were up 0.02% at $2.5055 per gallon.