A burst of cold weather across New England and much of the northeastern United States helped push natural gas futures above $4 per million British thermal units (BTUs). Some traders, however, saw the rise as more of a temporary phenomenon than a shift in the fundamentals of the market.
Natural gas, which heats more than 50 percent of the homes in the United States, trades with extreme sensitivity towards weather patterns – an unseasonably warm winter can undercut the price, while frigid months spike demand.
"The first cold shock is always a little boost for everybody," Michael Rose, the director of energy trading at Angus Jackson Inc., told Bloomberg News. "A little cold snap can help, but once it ends, we're right back where we started: oversupplied and under-demanded."
Indeed, natural gas stocks have grown in recent months, with total supplies rising 67 billion cubic feet n the last week to 3.821 trillion cubic feet. Another such rise would set an all-time high of total inventories.
On the New York Mercantile Exchange, Henry Hub natural gas futures for December delivery climbed 13.1 cents to $4.068 per million BTUs; contracts for January delivery rose 9.3 cents to $2.269 per million BTUs.
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