The futures have recovered and more their losses from yesterday.
U.S. natural gas futures headed higher early Friday, with a tighter supply and demand balanceand extended forecasts for warm weather again driving thefront-month contract to a three-monthhigh despite overbought technicals and comfortable supplies.Gas prices have gained about 17 percent so far this month, backed by signs that record productionwas finally slowing while demand was picking up as more electric utilities switch from coal to cheapergas to generate power.Chart traders said technicals turned bullish over the last month as futures rallied 40 percent from the10-year low of $1.90 per million British thermal units, breaking through some stiff resistance along the way.At 8:35 a.m. EDT (1235 GMT), front-month gas futures on the New York Mercantile Exchange wereup 7.6 cents, or 3 percent, at $2.67 per mmBtu after climbing earlier to $2.685 which marked theirhighest since Feb. 23.While some said the market was due for a pullback, noting the relative strength index had climbedinto overbought territory well above 70 percent, they did not rule out further gains once highertemperatures boost air-conditioning demand.But many remained skeptical of recent gains with storage and production still at or near all-time highsand prices reaching levels that could slow or even reverse utility fuel switching, a big factor in boostinggas demand this year."This (11-15 day) period begins where the prior (6-10 day) period left off, with some additional warmchanges to the Midwest and Northeast. The result will be a continuation of an abnormal amount of
cooling demand for late May across key regions," private forecaster MDA EarthSat said in a report.