COMMODITIES: Natural Gas Rises to Near Three-Month Highs as a Polar Vortex Moves Into the United States
09:21 AM EST, 02/05/2021 (MT Newswires) -- Benchmark natural gas rose above US$3.00 for the first time since November as temperatures for much of the United States are set to plunge, boosting heating demand for the fuel.
Gas for March delivery was last seen up US$0.09 to US$3.02 per million British thermal units in Nymex electronic trade, the highest since Nov.10.
The rise comes as Arctic weather is set to push into most of the United States, with temperatures in most of the country expected to remain below normal for at least the next two weeks.
"A polar vortex is set to hit North America, beginning today and accelerating through next week (and beyond)," Tudor, Pickering & Holt said in a note. "Forecasts have been bouncing around in terms of just how cold it may get but it appears we're staring down ~600 degree days over the next 2 weeks, ~33% above norms, which should drive incremental (residential and commercial) demand of ~175bcf above norms. Combined with the accompanying freeze offs, next week's draw (Feb 18 storage report) should push well into the 200s and it's possible the current surplus to the 5-year average of 11% (261bcf) is gone by the end of the month."
The Energy Information Administration on Thursday reported gas inventories last week fell by 192 billion cubic feet, close to expectations, leaving inventories 7.9% above the five-year average.