Press Esc to close

WorldOil

World Oil News Center



Natural gas futures extend rally, hitting four-month high

BY DAN STRUMPF
 
NEW YORK -- Natural gas futures extended their winning streak for a third straight session Friday, advancing to their highest level in four months on forecasts that cold temperatures will persist across most of the country in the coming weeks.

The chilly weather has been spurring unusually high demand for natural gas recently, as homes and businesses keep their heaters on for longer than usual. Prices for the fuel typically fall in March as temperatures rise, but they are 11% higher so far this month.

"Forecasters are predicting average temperatures as much as 40 degrees below normal," according to Aaron Calder, analyst at Gelber & Associates. "The market is moving higher today, but temperature forecasts must remain colder than normal to sustain these prices."

The National Oceanic and Atmospheric Administration calls for below-normal temperatures across the entire northern half of the country over the next six to 10 days, implying brisk demand for gas-fueled heating.

Natural gas for April delivery settled 6 cents, or 1.6%, higher at $3.872/MMBTU on the New York Mercantile Exchange. That is the highest settlement for the fuel since Nov. 23, when winter was just getting under way.

Gas futures have gotten a boost from recent sizeable draws from stockpiles, suggesting a combination of high demand and reduced supply. On Thursday, the Energy Information Administration reported 145 Bcf of natural gas were drawn from storage last week, well above expectations.

Analysts say the data implies that the cold temperatures have caused wells to be sealed off in some regions, curbing production.

"There are a number of reports with regards to the freeze-offs" impacting output, said Stephen Schork, editor of the Schork Report, an energy newsletter. "We had a pullback in production and we had increased demand because of the weather."

Dow Jones Newswires

03/15/2013

 

Bookmark and Share


WO DATA HUB

EngineeringTablesIcon-Large

Engineering Data Tables

World Oil's specialized upstream Engineering Data Tables featuring the Drill Bit Classifier, Tubing Tables and more. Get Total Access today.

WO SUPPLEMENTS

2013 Fracturing Technology

2013 Fracturing Technology

MEDIA CENTER

By Digital Publisher

Drill Bit Classifier World Oil published its renowned Drill Bit Classifier in September 2013. The Drill Bit Classifier is a comprehensive listing of major manufacturers' d...

ENERGY EVENTS

Upcoming Events