US natgas futures jump 3.66% on weather, oil

19 February 2008 21:01  [Source: ICIS news]

HOUSTON (ICIS news)--US natural gas futures jumped 31.7 cents (+3.66%) to close on Tuesday at $8.977/m Btu, the highest daily settlement since 31 January 2006, on the combination of stronger demand and a surge in energy complex contract prices.

Colder temperatures in the midwest and northeastern US and returning industrial and commercial demand after the President’s Day holiday weekend increased demand for natural gas in the near term.

Crude oil and refined product contract values jumped sharply, providing further impetus for prices to rise.

Higher demand augmented buying interest after the Energy Information Administration (EIA) said on Thursday that natural gas stocks declined by 120 bcf to reach 1,942 bcf for the week ended 8 February.

The latest inventory level was 8.6% lower than for the same week in 2007, but 5.9% higher than the five-year average level.

Trade sources said that low stock levels at the end of the winter heating season could heighten natural gas demand during the summer months, as market participants seek to rebuild inventories ahead of the 2008-2009 winter heating season.

Crude oil prices gained more than $4.00/bbl amid speculation as to the outcome of the upcoming OPEC market meeting and reports that a Nigerian insurgent leader had been killed by gunfire. Refined product contract prices were 10.00-12.00 cents/gal higher as the entire energy complex followed crude oil values higher.

By: Brian McIntyre
+1 713 525 2653

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