We have updated our privacy policy and terms & conditions. Find out more here.
3
 

Natural gas futures hit 2-week high on cold weather forecasts

By Investing.comCommoditiesJan 14, 2013 03:37PM GMT Add a Comment
 
AA
+
-
Investing.com - Natural gas futures extended strong gains from the previous session to hit a two-week high during U.S. morning trade on Monday, as forecasts showing colder weather in the coming week boosted near-term demand expectations for the heating fuel.

Natural gas futures hit 2-week high on cold weather forecasts
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts on winter heating demand.

On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD3.398 per million British thermal units during U.S. morning trade, up 2.15% on the day.       

It earlier rose by as much as 2.3% to trade at a session high of USD3.404 per million British thermal units, the strongest level since December 31.

Natural gas future prices rallied more than 4% Friday after weather forecasts showed that colder-than-normal temperatures were expected across key parts of the U.S. later in January and into early-February, boosting sentiment on the heating fuel.

Weather service provider MDA Weather said that it expected temperatures to fall below normal in the Northeast and Great Lakes-region of the U.S. from January 21 through January 25.

Weather forecaster AccuWeather expected temperatures in New York to fall to 22 degrees Fahrenheit (minus 6 Celsius) on January 21, five degrees lower than usual.

Forecasts originally called for mild winter weather during the period. Bullish speculators are betting on the cool weather increasing winter demand for the heating fuel.

The heating season from November through March is the peak demand period for U.S. gas consumption. Nearly 50% of all U.S. households use gas for heating.

Meanwhile, last week’s larger-than-expected drawdown from winter inventories also kept momentum to the upside.

The U.S. Energy Information Administration said that natural gas storage in the U.S. in the week ended January 4 fell by 201 billion cubic feet, the most since February 2011.

Inventories fell by 95 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 149 billion cubic feet.

Total U.S. natural gas storage stood at 3.316 trillion cubic feet as of last week, 2.6% below last year’s level and 10.7% above the five-year average for this time of year.

Early withdrawal estimates for this Thursday’s storage data range from 100 billion cubic feet to 143 billion cubic feet.

Inventories fell by 89 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 144 billion cubic feet.

The heating fuel has lost nearly 15% since touching a 14-month high of USD4.001 per million British thermal units on November 26, on speculation that temperatures won’t be cold enough to erase a surplus of the fuel in storage.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February shed 0.5% to trade at USD93.51 a barrel, while heating oil for February delivery added 0.5% to trade at USD3.025 per gallon.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Gold gains on soft Chinese growth data
By 
Investing.com
 - Oct 21, 2014
Crude gains on U.S., Chinese economic indicators
By 
Investing.com
 - Oct 21, 2014

Add a Comment

 

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Total
 
 
 
Are you sure you want to delete this chart?
 
 
 
Are you sure you want to delete this chart?
 
 
 

Successfully Reported

Thank you. This comment has been flagged for a moderator.
_touchLoadingMsg