Winter Chill Buoys U.S. Gas Bulls as Prices Rise for Second Dayby
Forecasts for frigid weather are reminding U.S. natural gas traders that winter isn’t over yet.
The coldest air of the season will blanket the eastern U.S. from Feb. 13 through Feb. 17, boosting gas consumption, according to MDA Weather Services. New York’s low temperature on Feb. 13 may be 6 degrees Fahrenheit (minus 14 Celsius), 23 less than average, data from AccuWeather Inc. show.
Gas bulls need an extended chill to erode a stockpile surplus that’s the biggest since 2012. Prices dropped below $2 per million British thermal units last week for the third time in three months, tumbling on concern that production from shale formations would overwhelm demand amid mild weather.
“We’re seeing a cold streak that was not in the cards last week,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “The forecasts keep getting adjusted colder, which is giving the market a pretty strong bid.”
Natural gas for March delivery rose 7.7 cents, or 3.7 percent, to settle at $2.14 per million British thermal units on the New York Mercantile Exchange. Prices dropped to $1.954 in intraday trading Feb. 4, the lowest since Dec. 23.