U.S. Natural Gas Jumps to 13-Week High After Pipeline Explosionby
U.S. natural gas futures surged to the highest price since January after an explosion on a major interstate pipeline curtailed supplies as a spring chill boosted heating demand.
Prices jumped after the fire and explosion disrupted shipments on a Pennsylvania segment of Spectra Energy Corp.’s Texas Eastern line, which carries the fuel from the Gulf Coast to New York. The pipeline system had been transporting to the east 1.3 billion cubic feet of gas a day through the Delmont compressor in Westmoreland County, according to Bloomberg New Energy Finance.
The pipeline blast is crimping supplies as the coldest weather since mid-April stokes gas consumption in the Northeast. Gas futures capped a second straight monthly gain on speculation that low prices will reduce output from shale formations as weather-driven demand trims the biggest seasonal stockpile glut in four years.
“It seems like this is a slightly delayed price reaction to the news of the pipeline explosion,” Kyle Cooper, director of research at IAF Advisors in Houston, said by phone. “We have some below-normal temperatures in the Northeast, which is compounding concerns about supply constraints.”
Natural gas for June delivery rose 10 cents, or 4.8 percent, to $2.178 per million British thermal units on the New York Mercantile Exchange, the highest settlement since Jan. 29. Gas climbed 11 percent this month.