US natural gas futures gained a few cents Monday on forecasts for some heating demand in some Northern Tier states along the Canadian border after losing about 7 percent last week. Front-month gas futures on the New York Mercantile Exchange rose 3.8 cents, or 1 percent, to $3.831 per million British thermal units by 10:09 am EDT (1409 GMT). The October front-month traded between $3.76, just a few cents over a nine-month low set in mid August, and $3.85. The front-month was trading down 6 percent for the month and 10 percent for the year.
Traders noted the 14-day moving average of $3.90 climbed over the 40-day of $3.89 for the first time since early July. Analysts estimated utilities added about 79 billion cubic feet of gas into storage this week, the same as last week's 79-bcf injection. That is well over builds of 64 bcf in the same week a year ago and a five-year average of 60 bcf. MDA Weather Services forecast cooler-than-normal temperatures over the Central and Eastern United States over the next 15 days.
US weather models also predicted cooler-than-normal temperatures over the next two weeks with 111 cooling degree days, down from 128 on Friday, versus a normal of 117 for this time of year, according to Thomson Reuters Analytics. Money managers, including hedge funds and commodity trading advisers, cut bullish bets in gas futures, options and swaps in the week to September 2 to the lowest since mid August. That is close to the lowest since November, data from the US Commodity Futures Trading Commission (CFTC) showed on Friday.
On the NYMEX, the premium of the front-month gas contract over spot Appalachian coal climbed to $1.48 from $1.44 per mmBtu on Friday. A gas premium over $1.50 makes it cost-effective for some utilities to burn coal. On the Intercontinental Exchange, next-day gas at the Henry Hub, the benchmark supply point in Louisiana, held steady at an average of $3.84, the same as Friday, while New York gained about 40 cents to $2.49. In US nuclear news, there were about 4,500 megawatts offline on Monday, up from 1,200 MW out Friday. That compared with 5,800 MW out a year ago and a five-year average out of 5,600 MW.