Natural Gas Futures Rise, Heating Oil Hits 5-Month Low
Edwards, Cliff, THE JOURNAL RECORD
Natural gas futures soared Tuesday on the New York Mercantile Exchange after a return of cold weather to the Midwest and Northeast pointed to an increase in heating demand.
Heating oil futures slumped to a five-month low. On other commodity markets, coffee futures prices set new highs.
Natural gas and heating oil futures have been under pressure during an extended period of unseasonably warm weather across most of the country. Temperatures as much as 20 degrees above normal in the past week are expected to have reduced sharply use of the heating fuels, particularly in the Northeast and Midwest where demand is strongest. But temperatures in the central United States are expected to fall well below normal in some regions by the end of the week, the National Weather Service is projecting. And some private forecasters say that cold front will head east by the beginning of next week. "Nobody's sure how cold it will be, but there's hope it will get down into the major population centers," said Jeff Foose, director of trading at KCS Energy. Cold weather, however, is unlikely to seriously crimp supplies; analysts say there is more than enough natural gas in storage to meet demand through the rest of the winter. "We're basically in great shape, particularly in the Northeast," Foose said. "There's been no reason to draw on storage for a while, and this weather pattern coming in is basically what you would expect the weather to be for this time of the year." Natural gas for March delivery rose 18.4 cents to $2.497 for each 1,000 cubic feet. The weather forecasts did not help heating oil futures, which fell to a five-month low after the exchange reported 2.5 million gallons of heating oil will be delivered to the Northeast. That comes at a time when stocks already appear ample. …