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Natural gas fluctuates as freezing conditions set to ease

Published 01/06/2014, 11:19 AM
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Investing.com - Natural gas futures were moving between small gains and losses on Monday after forecasters said the extreme cold conditions affecting large areas of the U.S. look set to ease in the coming days.

On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.307 per million British thermal units during U.S. morning trade, inching up 0.06%. Nymex February gas futures dipped to lows of USD4.285 earlier.

According to the U.S. National Weather Service, a bitterly cold, arctic air mass will continue to bring dangerously-low temperatures and wind chill values across the central and eastern U.S. until Tuesday.

Colder-than-average winter temperatures increase the need for gas-fired electricity to heat homes, boosting demand for natural gas. The heating season from November through March is the peak demand period for U.S. gas consumption.

U.S. supply levels also remained in focus. Total U.S. natural gas storage stood at 3.071 trillion cubic feet as of last week, approximately 16% below last year's unusually high level and nearly 9% below the five-year average for this time of year.

Early withdrawal estimates for this Friday’s storage data range from 110 billion cubic feet to 150 billion cubic feet, compared to a drop of 126 billion cubic feet during the same week a year earlier. The five-year average change for the week is a decline of 121 billion cubic feet.

Nymex natural gas prices have been well-supported in recent weeks, as chilly early winter weather helped drive prices to a two-and-a-half year high of USD4.578 on December 23. Nymex gas prices ended 2013 with a gain of nearly 22%, the biggest annual increase since 2005.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February slipped 0.09% to trade at USD93.88 a barrel, while heating oil for February delivery was up 0.65% USD2.9586 per gallon.




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