Forexpros – Natural gas prices were higher on Wednesday, climbing above USD3.00 per million British thermal units as forecasts of colder-than-normal weather in the U.S. boosted demand expectations for the heating fuel.
On the New York Mercantile Exchange, natural gas futures for February delivery traded at USD3.029 per million British thermal units during U.S. morning trade, jumping 1.3%.
It earlier rose by as much as 1.17% to trade at a session high of USD3.061 per million British thermal units. Prices dropped to a 27-month low of USD2.934 on Tuesday.
Sentiment on the heating fuel improved after the National Weather Service said the U.S. Northeast was forecast to have the coldest air in at least 10 months later in the week.
The weather service has issued a warning that the low temperatures and winds of 10 to 20 mph may bring wind chill values below zero Fahrenheit throughout parts of New York, Massachusetts, Connecticut and Rhode Island.
Weather service provider AccuWeather said that temperatures in Manhattan were expected to reach 15 degrees Fahrenheit (minus-9 Celsius) and may fall even lower north of the city.
Gains were limited after longer-term weather outlooks showed that milder weather was forecast to follow this week’s blast of cold weather.
Prices have closely tracked weather forecasts in recent weeks. Above-normal winter temperatures reduce the need for gas-fired electricity to heat homes, dampening demand for natural gas.
Gas futures typically climb during the winter months, as temperatures fall and demand for heating fueled by natural gas rises. But mild early-winter weather coupled with high inventory levels in the U.S. have kept prices depressed in recent weeks.
Currently, total U.S. natural gas supplies stand at 3.548 trillion cubic feet, up 9.1% from a year earlier and 13.7% above the five-year average for this time of year.
Markets were looking forward to the U.S. Energy Information Administration’s weekly report on U.S. natural gas stockpiles for the week ended December 30 on Thursday.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February eased down 0.05% to trade at USD102.92 a barrel, while heating oil for February delivery climbed 1.3% to trade at USD3.078 per gallon.
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