US natural gas futures reach five-year high above $6/MMBtu

HOUSTON (ICIS)–Predictions for colder temperatures through coming weeks and concerns surrounding rapidly depleting inventories sent NYMEX natural gas futures soaring above the $6/MMBtu level on Wednesday.

The March front-month contract posted its largest daily jump of the year, climbing 60 cents/MMBtu or 11% to a five-year high $6.15/MMBtu.

High demand bulls have lifted the contract by nearly $1/MMBtu, or 18%, in the space of just two sessions.

The contract now sits above the $6/MMBtu mark for the first time since January 2010, settling at the highest front-month close since December 2008.

Along the forward contract curve, the April contract also posted a gain of 20 cents/MMBtu while other futures contracts dated for delivery through to March 2015 finished up by 1-2%.

Temperature predictions for the last week of February shifted even colder than previously forecast overnight.

Temperatures across demand centres such as Chicago could be bitterly below the seasonal norm towards the end of the month, forecasters said, further intensifying pressure on already heavily drained natural gas inventories, which are closing in on their lowest level in three years.