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Natural Gas Rises to Highest Price This Year

October 19, 2012 at 23:42 by Vladimir Vyun

Natural gas advanced as demand from power plants was strong. Demand grew 16 percent in Jul from a year ago, reaching the highest level this year. Analysts expect that consumption will rise 14 percent (on an annual basis) this quarter. Demand is also expected to be robust as forecasters predict that this winter will be colder than the previous one.

At the same time, the US Energy Information Administration reported that inventories grew 51 billion cubic feet. That is below the five-year average increase of 71 billion for the week. It looks like supply is going to trail demand and that is also bullish for gas.

November futures for delivery of natural gas went up $0.03 to $3.617 per million British thermal units on NYMEX, touching the highest price since December 1. The prices have been 21 percent this year so far.

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