Eastern Cold Spell Boosts Natural Gas Futures for Second Dayby
Northeast temperatures could be below normal through Oct. 29
Marcellus gas production to drop for 4th straight month: EIA
Cold nights in the eastern U.S. are proving to be a boon for natural-gas bulls, sending futures higher for a second day.
Temperatures will probably be below normal in the Northeast through Oct. 29, stoking heating demand, according to MDA Weather Services. Boston’s low may drop to 38 degrees Fahrenheit (3 Celsius) on Oct. 28, 5 less than usual, data from AccuWeather Inc. show.
“We’ve definitely seen some unseasonably cold weather,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. ”We’re seeing some additional below-normal temperatures at the back of the 10-day forecast, so prices are being supported.”
Natural gas for November delivery rose 3.4 cents, or 1.4 percent, to settle at $2.476 per million British thermal units on the New York Mercantile Exchange. Volume was 14 percent above the 100-day average.
The low in New York on Oct. 28 may be 43 degrees Fahrenheit, 3 less than average, AccuWeather data show. About 49 percent of U.S. households use gas for heating.
Natural gas output from the Marcellus formation, the biggest shale reservoir by volume, may drop 1.3 percent to 15.892 billion cubic feet a day in November, falling for a fourth straight month to the lowest since January, the U.S. Energy Information Administration said Oct. 13 in its monthly Drilling Productivity report.
Production from the seven largest shale basins in the U.S. may decline 0.7 percent to 44.882 billion cubic feet a day in November, the EIA said.
Gas demand from electricity producers is expected to surge 16 percent this year to 25.8 billion cubic feet a day as generators take advantage of low prices, the Energy Information Administration said Oct. 6 in its monthly Short-Term Energy Outlook. Consumption by power plants is up 9.8 percent from a year ago, according to LCI Energy Insight in El Paso, Texas.