Natural Gas Slightly Higher as Weather Forecasts Fluctuate
Published: Feb 12, 2013
--Natural-gas traders weigh temperature drop against milder weather ahead
--Nymex natural gas recently 0.1% higher at $3.284/MMBtu
--Prices hold just above 200-day moving average
By Jerry A. DiColo
NEW YORK--Natural-gas futures were slightly higher Tuesday as fluctuating temperatures predicted over the next two weeks are keeping traders on edge about gas-fired heating demand.
Natural gas for March delivery rose 0.5 cent, or 0.1%, to recently trade at $3.284 a million British thermal units on the New York Mercantile Exchange.
Investors were keeping close watch on weather outlooks, which showed that milder temperatures across the U.S. are likely to be overtaken by a blast of cold in the next six-to-10 days.
Private forecaster WSI Energycast said Tuesday that below-normal temperatures are expected to move across the eastern U.S. over the next week, followed by a period of milder weather and then another temperature dip.
The temperature swings have traders on edge and have led to prices holding just above the 200-day moving average, a key technical level of support. In the winter weather is typically the biggest factor in natural-gas prices, because cold temperatures raise demand for heating by homes and businesses.
Roughly half of U.S. homes use gas-fired heating, while many more use electric heat powered by gas-fired utilities.
Jim Ritterbusch, head of oil-trading advisor Ritterbusch and Associates, said in a research report Tuesday that the fluctuating forecasts are restraining big price swings, while the coming end to the high-demand winter season is starting to diminish the importance of the predictions.
"The temperature factor will continue to diminish in importance," he said.
For the past month, natural-gas prices have held between $3.20 and $3.50/MMBtu. While temperatures have fallen, in recent weeks drops in U.S. stockpile levels have come in below analyst estimates.
U.S. gas inventories stand at 2.684 trillion cubic feet, according to the Energy Department, 15% above the five-year average for this time of year.
Natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.305/MMBtu, according to IntercontinentalExchange, compared with Monday's average of $3.1995/MMBtu. Natural gas for next-day delivery at Transcontinental Zone 6 in New York traded at $6.50/MMBtu, up from $5.4570/MMBtu.
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(END) Dow Jones Newswires
February 12, 2013 09:55 ET (14:55 GMT)
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