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Natural gas prices snap back on cold weather outlook

Weather's impact on nat gas

Natural gas futures bounced back sharply Monday as forecasts showed colder weather on the horizon that could drive up demand for heating fuels.

The latest six-to-10-day National Oceanic and Atmospheric Administration forecast shows more normal temperatures for the East Coast and parts of the Midwest, and cooler weather in the South and Southeast, as well as parts of the West and Midwest. The NOAA forecast map also shows warmer-than-normal temperatures for Alaska, and in a separate band across New York state and into the northern Midwest.

Natural gas futures for February soared more than 8 percent to $2.24 per million BTUs Monday. Natural gas futures were at 1999 levels Dec. 17 as the weather outlook promised a balmy December. The front month January contract expires on Wednesday, and it rose 9.8 percent to settle Monday at $2.228/mmBTU.