Natural gas rose for a second day in New York as a winter storm brings heavy snow and frigid weather to the East Coast, stoking demand for heating fuel.
Futures for February delivery gained as much as 2.3 percent to $4.534 per million British thermal units in electronic trading on the New York Mercantile Exchange, the highest since July 2011, and were at $4.532 at 12:52 p.m. London time. The contract climbed 2.4 percent to settle at $4.431 Monday. The volume of all futures traded was about 76 percent above the 100-day average.
Prices may rise as high as $4.50 per million Btu, Goldman Sachs said in an emailed report Monday. U.S. gas inventories may drop to about 1.39 trillion cubic feet by the end of March, driven by the recent “polar vortex,” it said.
“Bitter cold” is forecast to sweep east of the Mississippi River through the end of January, according to MDA Weather Services in Gaithersburg, Md. A blast of arctic air colliding with Atlantic moisture will bring at least 6 inches of snow from Washington to Boston, said AccuWeather in State College, Pa.
U.S. gas inventories fell 287 billion cubic feet to 2.53 trillion in the seven days ended Jan. 10, the biggest drop in data going back to 1994, the Energy Information Administration reported last week. A supply deficit to the five-year average widened to a record of almost 15 percent.
The latest winter storm grounded flights by the thousands Monday in the U.S. and scuttled political events. It is forecast to wind down along the U.S. East Coast Tuesday and turn toward the Canadian Maritimes.
About 49 percent of U.S. households use gas for heating, with the largest users in the Midwest, followed by the Northeast, according to the EIA, the Energy Department’s statistical arm.