natural gas futures brokers

natural gas futures brokers

November 19th, 2014

Natural gas futures rose to a one-week high in New York as cold weather spurred demand for the heating-fuel.

Temperatures will be below normal across the eastern U.S. over the next five days, with low readings lingering in the central states next week, said Commodity Weather Group LLC. A government report tomorrow may show that U.S. gas inventories fell 13 billion cubic feet last week, the first drop of this season, signaling the beginning of the peak-demand period, 12 analyst estimates compiled by Bloomberg show.

“You are challenging record lows and snowfall accumulations in some areas,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “People are asking if this winter is going to resemble last year and the early come-back on that is that it looks like it has the potential.”

Natural gas for December delivery jumped 19.5 cents, or 4.6 percent, to $4.439 per million British thermal units at 11:57 a.m. on the New York Mercantile Exchange after rising to $4.508, the highest intraday price since Nov. 10. Volume for all futures traded was more than double the 100-day average. Gas is up 25 percent from a year ago.

December $4 puts were the most active options in electronic trading, falling 1.9 cents to 1.1 cents on volume of 1,110 at 11:44 a.m. January $6 calls, the second-most active, were up 4.7 cents at 8.8 cents on volume of 1,006.

Natural Gas Futures: Lake-Effect

More than 5 feet (1.5 meters) of snow has fallen across western New York near Buffalo and an additional 2 feet may drop in many areas through tomorrow, according to the National Weather Service.

The snow is caused by lake-effect storms, which occur when cold air passes over relatively warm water. Governor Andrew Cuomo declared a state of emergency for at least 10 New York counties along Lake Erie and Lake Ontario.

New York’s temperature today fell to 22 degrees Fahrenheit (minus 6 Celsius) and Chicago fell to 19, 16 below normal for both cities, according to CustomWeather Inc. in San Francisco. About 49 percent of U.S. households use gas for heating, led by the Midwest and the Northeast, Energy Information Administration data show.

The central states will see below-normal readings linger next week while the East Coast returns to seasonal norms, said Commodity Weather in Bethesda, Maryland. Another wave of cold air from Canada will send readings lower in the Midwest and Northeast from Nov. 29 through Dec. 3.

Natural Gas Futures: Winter Weather

“The current weather across the U.S. is typical of late December through February,” Dominick Chirichella, senior partner at the Energy Management Institute in New York, said in a note to clients today.

“Daily weather heating-related nat gas demand is certainly at mid-winter levels and will have a direct impact on the overall supply and demand balances as well as the inventory pattern for at least the next few weeks,” he said.

Gas deliveries to U.S. customers have averaged 88.1 billion cubic feet a day so far this week, heading for the highest average since the seven days ended Feb. 28, according to LCI Energy Insight in El Paso, Texas. Deliveries are up 14 percent from last week and 35 percent from the same time last year.

- Naureen S. Malik in New York at Bloomberg.