A fresh blast of arctic air swept across the U.S. on Tuesday and sent natural gas futures rising on expectations for businesses and homes to crank up their heating and prompt thermal power plants to burn more of the commodity to meet demand.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.408 per million British thermal units during U.S. trading, up 1.88%. The commodity hit session high of USD4.266 and a low of USD4.448.
The February contract settled down 1.28% on Friday to end at USD4.326 per million British thermal units.
There was no settlement on the Nymex on Monday as floor trading remained closed due to the Martin Luther King Jr. Day holiday. Monday’s transactions will be booked today for settlement purposes.
Natural gas futures were likely to find support at USD4.119 per million British thermal units, the low from Jan. 13, and resistance at USD4.495, Thursday''s high.
A fresh blast of winter weather will bring heavy snowfall and below-normal temperatures across much of the northeastern U.S. through Wednesday, with blizzard conditions likely in some areas.
Longer-range forecasts also boosted natural gas prices.
In its 8-14 day outlook, Natgasweather.com predicted milder temperatures to return for much of the country though many areas will still experience below-normal mercury readings, which gave prices some support.
U.S. supply levels also remained in focus. Natural gas supplies dropped by a record-high 287 billion cubic feet last week to 2.530 trillion cubic feet, approximately 15% below the five-year average for this time of year.
The previous record drop was a decrease of 285 billion cubic feet in the seven days ended December 13, Energy Information Administration data show.
Natural gas inventories have fallen by 1.3 trillion cubic feet, or 34%, since November 8 as frigid winter temperatures in the U.S. led households to burn a higher than normal amount of the fuel in furnaces to heat their homes.
Some market analysts expect supplies at the end of the winter heating season in March to be at their lowest in six years.
Wall Street investment bank Goldman Sachs lowered its forecast for inventory levels at the end of March to 1.39 trillion cubic feet, driven by the recent “polar vortex.”
Goldman had previously estimated U.S. gas inventories at 1.61 trillion by the end of March.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in March were up 0.43% and trading at USD95.00 a barrel, while heating oil for February delivery were up 0.71% and trading at USD3.0453 per gallon.
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