Investing.com - Natural gas prices jumped to an 11-week high on Friday, as updated weather forecasting models pointed to freezing temperatures in the U.S. east coast until the end of the month.
Bullish speculators are betting on the cool winter weather to increase demand for the heating fuel. The heating season from November through March is the peak demand period for U.S. gas consumption.
On the New York Mercantile Exchange, natural gas for delivery in February surged 9.0 cents, or 3.78%, to close the week at $2.472 per million British thermal units. It earlier rose to $2.495, the most since October 20.
On Thursday, natural gas rallied 11.5 cents, or 5.07%, after weekly inventory data showed that stockpiles fell more than expected last week.
The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. fell by 113 billion cubic feet, more than expectations for a decline of 99 billion. That compared with a drawdown of 58 billion cubic feet in the prior week, 116 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 129 billion cubic feet.
Total U.S. natural gas storage stood at 3.643 trillion cubic feet, 14.7% higher than levels at this time a year ago and 12.7% above the five-year average for this time of year.
For the week, natural gas futures soared 10.6 cents, or 5.78%, the third straight weekly gain. Prices are up more than 30% since hitting a 17-year low of $1.684 on December 18, as forecasts called for cool weather, following an unusually mild start to winter due to the El Niño weather phenomenon.
The EIA's next storage report slated for release on Thursday, January 14 is expected to show a withdrawal of approximately 105 billion cubic feet for the week ending January 8.
That compared with a decline of 236 billion cubic feet in the same week last year, while the five-year average change for the week is a drawdown of 158 billion cubic feet.
Elsewhere on the Nymex, crude oil for February delivery settled at $33.16 a barrel by close of trade on Thursday, down $4.44, or 10.48%, on the week, while heating oil for February delivery slumped 4.42% on the week to settle at $1.052 per gallon.