U.S. Gas Surges By Most in Two Weeks on Shrinking StockpilesBy
U.S. natural gas futures rallied by the most in two weeks on speculation that rising demand for the power-plant fuel is eating away at a glut of supplies.
Prices gained by 2.6 percent as traders projected a 71-billion-cubic-foot gain in U.S. stockpiles of the fuel last week, smaller than the five-year average of 95 billion. That has traders looking to lock in supplies ahead of the winter heating season, Stephen Schork, president of energy consulting group Schork Group Inc., said by phone from Villanova, Pennsylvania.
Warmer-than-usual weather that had people blasting their air conditioners well into September is rescuing the market from a collapse that sent prices plunging to decade-lows just seven months ago. Gas futures have been trading above $3 per million British thermal units for the first time in over a year. It’s raising the prospect that the market could end up with lower-than-normal supplies over the winter when demand is set to rise yet again.
“It’s the first contract of the winter, and supplies are low,” Schork said. “Now we’re in a situation where the market is starting to rally.”
Gas futures for November delivery were up 7.7 cents to settle at $3.041 per million British thermal units on the New York Mercantile Exchange. They jumped to as high as $3.06 earlier.
The Energy Information Administration is scheduled to release estimates for last week’s gas stockpiles on Thursday.
“The storage report is going to be light relative to last year, and I think that’s really starting to register,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said in a phone call. “You’re seeing this general bullish sentiment.”