Bitter cold spurs higher natural gas prices
The bitter cold has caused natural gas prices to see its biggest weekly gain since September 2012, according to Bloomberg:
Gas climbed 0.9 percent to the highest price in more than two years as Commodity Weather Group LLC in Bethesda, Maryland, said the cold weather will persist in the eastern half of the U.S. through Feb. 1.
A government report today showed that inventories fell 107 billion cubic feet in the week ended Jan. 17 to 2.423 trillion. Analyst estimates compiled by Bloomberg showed an expected drop of 103 billion.
“The storage number was pretty much in line with expectations, but there’s a strong buy in the market right now,” said Kent Bayazitoglu, an analyst at Gelber & Associates in Houston. “There’s ongoing cold in the forecasts and we could see very large withdrawals next week and the week after.”
Natural gas for February delivery rose 4.1 cents to $4.73 per million Btu on the New York Mercantile Exchange, the highest settlement since June 10, 2011. Trading volume was 77 percent above the 100-day average at 2:42 p.m. Gas has jumped 9.3 percent this week, heading for the biggest increase since the seven days ended Sept. 28, 2012.
Last year natural gas prices rebounded after hitting historic lows, due to oversupply caused by the huge surge in production in the Marcellus Shale and elsewhere.
The price fluctuations have caused companies here to shift operations from drilling for dry gas in northern parts of the state to the wet gas in southwestern Pennsylvania.