03 January 2014, News Wires -US natural gas futures were up on the first day of trading in 2014 on Thursday, reversing Tuesday’s losses, on short-term forecasts for extreme cold temperatures and a snow storm headed to the U.S. Northeast from the Midwest.
Private forecaster MDA Weather Services called for cold, stormy weather to continue in the 1- to 5-day range, but moderated temperatures are expected in the 6- to 10-day range, followed by strong warmth in the East in the 11- to 15-day forecast, Reuters reported.
“This forecast should result in an above normal level of heating demand which should result in the total inventory gap widening versus last year and the five-year average,” Dominick Chirichella, a partner at the Energy Management Institute, told the news wire.
“On the other hand, the eight- to fourteen-day forecast is decidedly less supportive.”
Chilly early winter weather has helped drive the front month up more than 25% since 1 November, with the contract posting a 2-1/2-year high of $4.532 on 23 December.
The frigid conditions are among the factors that have helped revive US gas prices, which sank so low in the wake of abundant natural gas from shales that much new drilling became uneconomic.
Front-month February gas futures on the New York Mercantile Exchange, settled up 9.1 cents, or 2.2%, at $4.321 per million British thermal units. The day’s trade ranged between $4.213 and $4.331.
In the ICE cash market, prices for Friday delivery at Henry Hub, the benchmark supply point in Louisiana, dipped $0.01 to $4.33.
Gas on the Transco pipeline at the New York citygate jumped $15.72 to $31.12 as cold temperatures and a winter storm expected to hit the northeast region Thursday night caused some pipelines to reach capacity.
Analysts polled by Reuters expected to see a drawdown of 126 billion cubic feet of gas reserves in this week’s storage data for the week ended 27 December.