- Below-normal temperatures may linger in East through Jan. 22
- Gas stockpiles are 14.6 percent above the five-year average
Cold weather creeping back into forecasts for the eastern U.S. sent natural gas futures to an 11-week high.
Frigid conditions in the Midwest will reach the East Coast next week, lingering through Jan. 22, according to a midday update to the government’s Global Forecast System weather model. Earlier outlooks had shown warmer readings in the Northeast.
Gas has rebounded from a 16-year low as cold increases the odds of reducing the biggest supply glut since 2013. The lower temperatures have stoked heating demand and curtailed production, limiting the size of weekly stockpile gains.
“There’s a lot of new uncertainty in the weather forecasts,” said Tom Saal, senior vice president of energy trading at FCStone Latin America LLC. “The supply side looks pretty healthy, but that can change abruptly if we do get extreme cold.”
Natural gas for February delivery rose 9 cents, or 3.8 percent, to $2.472 per million British thermal units on the New York Mercantile Exchange, the highest settlement since Oct. 20. Prices have jumped 47 percent from a 16-year intraday low on Dec. 18 and gained 5.8 percent this week.
A stockpile surplus to the five-year average has been expanding since the week ended Dec. 11. Inventories totaled 3.643 trillion cubic feet as of Jan. 1, 14.6 percent above the norm. Meanwhile, production declined for three consecutive weeks through Dec. 31, PointLogic Energy data show.