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Natural Gas Futures to Settle at Best Levels in a Week

January 11, 2018 at 17:29 by Andrew Moran

Natural gas futures are poised to finish the trading session at their best levels in about a week. After data highlighted the biggest withdrawal in US supplies in storage on record, natural gas prices surged more than 5%.

February natural gas futures rose $0.164, or 5.64%, to $3.07 per million British thermal units at 16:16 GMT on Thursday on the New York Mercantile Exchange. Natural gas prices are on track to end the trading day at their highest levels in a week.

According to the US Energy Information Administration (EIA), US natural gas storage declined by 359 billion cubic feet (bcf) in the week ending January 5, which is more than the initial forecasts of 318 bcf. This beats the January 2014 record of 287 bcf. The EIA reports that total natural gas storage stands at 2.767 trillion cubic feet (tcf), a figure that is roughly 12% below the five-year average in winter.

Because of the deep freeze and severe winter storms hitting the US east coast, natural gas prices have advanced approximately 5% this week. With the harsh cold impacting the electric power grid across the New England region, there was a greater demand for gas as furnaces were cranked up.

Oil is also rallying towards the end of the trading week. February West Texas Intermediate (WTI) crude futures soared $1.00, or 1.57%, to $64.57 per barrel, while February Brent crude futures jumped $0.58, or 0.84%, to $69.78 a barrel. February gasoline futures rose 1.15% to $1.85 per gallon, while February heating oil increased 0.47%, to $2.09 a gallon.

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