Returning Cold Sends U.S. Gas to Biggest Gain Since Decemberby
Forecasts for renewed cold after this week’s thaw sent U.S. natural gas to the biggest one-day gain in a month.
Temperatures may be below normal in the central U.S. from Feb. 3 through Feb. 12, according to MDA Weather Services. An Energy Information Administration report Thursday showed the biggest withdrawal from gas stockpiles in 11 months.
Gas has jumped 36 percent from a 16-year low in December on speculation that winter heating demand will reduce an inventory surplus to the five-year average. Production from shale formations has pushed stockpiles to a seasonal record, pressuring futures lower.
“Average temperatures have been moving lower, especially in the Midwest,” said Santiago Diaz, energy trading associate at FCStone Latin America LLC in Miami. “The Chicago area is one of the highest gas-consuming regions of the U.S., so traders are paying special attention to these forecasts.”
Natural gas for March delivery rose 11.6 cents, or 5.3 percent, to settle at $2.298 per million British thermal units on the New York Mercantile Exchange, the biggest one-day gain since Dec. 31. Prices climbed 7.4 percent this week and dropped 1.7 percent in January.
Inventories totaled 3.086 trillion cubic feet as of Jan. 22, 16.3 percent more than the five-year average for the period. Meanwhile, the number of U.S. gas rigs is at a record low as producers pull back amid tumbling prices.