natural gas futures brokers

natural gas futures brokers

January 5th, 2015

Natural gas jumped a second day, extending a rally from a 27-month low as speculation an arctic air blast may boost demand made the fuel today’s biggest commodity gainer.

Futures for February delivery rose as much as 4.4 percent in electronic trading on the New York Mercantile Exchange. Gains were the most in the Bloomberg Commodity Index of 22 raw materials. Temperatures will be 15 to 25 degrees Fahrenheit below average from the Northern Plains to the Upper Great Lakes, the National Weather Service said in an advisory on its website.

The fuel used in heating gained 17 percent in January 2014 as the so-called polar vortex brought freezing temperatures, boosting demand and accelerating withdrawals from storage sites. An estimated 49 percent of U.S. households use natural gas for heating, Energy Information Administration data show.

“The price is receiving some support from the near-term weather outlook,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail today. “This has brought back memories of what happened last January when prices spiked.”

Natural gas for February delivery climbed as high as $3.135 per million British thermal units before trading at $3.122 per million Btu by 5:58 a.m. New York time. The contract gained 4 percent on Jan. 2 after dropping to the lowest intraday level since Sept. 2012. The volume of all futures traded was almost double the 100-day average for this time of day.

Snow is possible over parts of the Middle Mississippi Valley to the Ohio Valley and the Northern Rockies and High Plains, the weather service said in a report at 2:51 a.m. eastern time today.

Gas consumption rose last week as temperatures slid in the Midwest to the East Coast, boosting storage withdrawals after they came in below-average for five weeks, according to Tim Evans, an energy analyst at Citi Futures Perspective in New York, and government data.

Natural Gas Futures: U.S. Stockpiles

Stockpiles of the heating and power-plant fuel probably declined by 133 billion cubic feet last week, compared with a 26 billion drop in the seven days ended Dec. 26, Evans said in a note on Dec. 31. Gas demand surged 21 percent to average 99.9 billion cubic feet a day, according to LCI Energy Insight in El Paso, Texas.

Inventories in the lower 48 states totaled 3.22 trillion cubic feet through Dec. 26, a 2.5 percent deficit to the five-year average, said the EIA, the Energy Department’s statistical arm. Supplies were 7.8 percent above year-earlier levels.

Gas futures fell below $3 per million Btu on Dec. 26 for the first time in 27 months after mild weather crimped demand and soaring production helped erode the inventory deficit. Prices dropped 32 percent last year.

“At this stage where increased production and milder weather has triggered a much slower than usual draw in inventories, it would take a prolonged arctic blast to support prices,” Hansen said.

- Chou Hui Hong in Singapore and Isis Almeida in London at Bloomberg.