The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Natural gas futures for March surged more than 5.5% to trade above $5500 per million British thermal units (BTUs) by mid-afternoon in New York, with today seeing the highest prices in the contract since 5 February.
We have seen big draws in the amount of natural gas in US storage in recent weeks, as the cold weather has spurred heating demand. Around half of homes in the US use natural gas for heating. The last three reports from the US Energy Information Administration have each shown weekly declines in excess of 200 billion cubic feet of natural gas, taking the total in storage down to 1686 billion cubic feet, well below the five-year average, and I would be expecting another big decline this week.
Winter storm Rex, the eighteenth named storm of this winter’s season, has already swathed the Midwest in snow and freezing rain, and is moving across the US Northeast today, likely to affect Massachusetts, southern Vermont, New Hampshire and Maine, with several inches of snow expected.
Natural gas was only available for electronic trading in New York yesterday because of the market close for US Presidents’ Day, with yesterday’s price movements being counted towards today’s official daily close on NYMEX.