U.S. Natural Gas Futures Reach Eight-Week High Amid Cold Blast

Natural gas futures rose to the highest in almost eight weeks in New York on speculation that unseasonably cold weather will trim a fuel stockpile glut.

Most of the eastern U.S. will see below-normal temperatures April 9 through April 13, according to MDA Weather Services. The high in Chicago on April 12 may be 55 degrees Fahrenheit (13 Celsius), 3 lower than average, according to AccuWeather Inc.

“A little winter weather is going a long way,” John Kilduff, a partner at Again Capital LLC in New York, said in a phone call. “It looks like this cold snap is a little more intense and a little longer-lasting than initially thought.”

Natural gas futures for May delivery jumped 4.2 cents, or 2.2 percent, to settle at $1.998 per million British thermal units on the New York Mercantile Exchange, the most since Feb. 10. Prices are down 15 percent so far this year.

Natural gas producers are using a rally in prices to hedge more output, Morgan Stanley analysts said in a research note Monday. Gas for delivery in August 2017 on the Nymex has risen 9.1 percent since the end of February, while producer and merchant bets on falling prices -- a common hedging strategy -- rose to the highest level since December.

Gas deliveries to power plants climbed 8.5 percent from a year ago to 21 billion cubic feet a day as of 2:44 p.m. Monday, according to PointLogic Energy in El Paso, Texas.

“We got a little bit of unseasonably cold weather,” Thomas Saal, senior vice president of energy trading at FCStone Latin America LLC in Miami, said by phone.

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