Natural Gas Gains on Colder Weather, Surge in Crude Oil Prices

By Mario Parker

Nov. 10 (Bloomberg) -- Natural gas rose more than 6 percent, the biggest gain since September, on speculation colder weather will stoke demand for the heating fuel. Prices also rose along with crude oil after China moved to spur economic growth.

Lower temperatures are probable across much of the U.S. beginning Nov. 17, the Climate Prediction Center in Camp Springs, Maryland, said in its 14-day outlook. Oil advanced after China unveiled a $586 billion stimulus package.

``The realization of winter has finally woken up the trolls,'' said Michael Rose, a director of trading at Angus Jackson Inc. in Fort Lauderdale, Florida. ``With the cold weather out there, natural gas is going up because it's the path of least resistance.''

Natural gas for December delivery climbed 45.9 cents, or 6.8 percent, to $7.216 per million British thermal units at 10:34 a.m. on the New York Mercantile Exchange. The gain was the biggest since Sept. 17, when gas advanced 8.7 percent.

Crude oil for December delivery rose $2.07, or 3.4 percent, to $63.11 a barrel.

China, the world's second-largest oil consumer, said yesterday it will spend the money through 2010 on housing and infrastructure, boosting demand for iron ore, crude oil and copper.

``The Chinese stimulus package has renewed hopes of strong energy demand,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago.

About 42 percent of U.S. natural gas demand comes from industrial and commercial users. The winter heating season, in which demand outstrips supply, begins in November. About 52 percent of U.S. households relay on the fuel for heat.

Supply Level

Natural gas stockpiles for the week ended Oct. 31 totaled 3.405 trillion cubic feet, down 3.7 percent from year earlier, the Energy Department said Nov. 6.

``The first real blast of cold weather'' has increased buying, said Carl Neill, an energy analyst at Risk Management Inc. in Chicago. ``It's long overdue. Seasonally, the market should be higher.''

The stimulus package along with higher prices fore stocks and commodities signal that ``you're hopefully getting some confidence back in the markets,'' Neill said.

To contact the reporters on this story: Mario Parker in Chicago at mparker22@bloomberg.net;