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Natural Gas Makes Largest Gains Since June

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Natural gas prices burst back above $4 with their largest day of gains since mid-June as a rush of early winter cold has traders expecting rising demand for the fuel.

Cool Canadian air is likely to spill over everything east of the Rockies by week’s end, creating the first jolt of heating demand for what had been a tepid market, weather forecasters and analysts said.

Traders responded to updated weather forecasts by buying up contracts as soon as off-hours trading began Sunday evening.

“What that tells me is people were freaked out,” said Todd Gross, chief investment officer at QERI LLC.

Natural gas is a notoriously volatile market, heightened now by competing pressure from record supply and winter worries. An onslaught of gas from U.S. shale drilling has pushed the fuel’s price low enough to make it competitive with coal and has several bank analysts expecting a glut by the spring. But with winter only weeks away, many traders are thinking of last winter’s record cold and demand spikes that pushed prices above $6 a million British thermal units.

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