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As October closed out, the price of natural gas posted triple-consecutive sessions of gains, as cooler-
than-usual weather is expected throughout the country.
With parts of Central and Western U.S. anticipated to see colder weather than normal, natural-gas futures rose 1.5% trading at $2.316 per million British thermal units. Demand for natural gas tends to climb in synchronization with increased use of heaters during frigid winters and air conditioners during scorching summers. Changes in weather and weather forecasts ultimately can precipitate price swings.
With parts of the country expecting to see colder fall temperatures this year, it is likely that demand for natural gas will climb. This is evidence of how this particular resource is influenced by the weather and when the weather changes, inventory and supply concerns move to the forefront.
Anticipated rise in natural-gas futures marks a moment of relief in the oil and gas industry. With a supply gut dragging down production 28% in the past 12 months, inventories increasing had many breathing a sigh of relief. Gas inventories, as reported by the Energy Information Administration increased to 87 billion cubic feet at the end of October.
Some analytics warn the supply will continue to rise, likely to impact prices. The over-supply problem appears to be ever increasing, which is demonstrated by poor reported earnings from major natural gas operators and low expectations surrounding natural gas futures.
In other OGE commodities, oil prices edged higher a day after stockpiles of U.S. crude posted the first decline in six weeks. U.S. crude futures rose .5% to $56.23 a barrel, while the global gauge climbed .8% to $61.67 a barrel.