Physical natural gas trading for weekend and Monday delivery seemed to resemble two Sumo wrestlers vying for supremacy with clashing weather-driven market forces from the Midwest grappling with offsetting market factors in the East.
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Spot natural gas prices for delivery Friday soared in Thursday’s trading as cold and in some cases blizzard conditions were forecast for major energy markets in New England and along the East Coast as winter storm Hercules moved in.
Northeastern physical gas values for Wednesday and Thursday delivery mostly ticked higher in Tuesday’s trading as traders had to lock up volumes ahead of mind-numbing cold and snow expected to pound eastern energy markets. Mid-Atlantic points posted stout gains, but pipes serving the Boston area suffered declines. Futures traders took a big hit with February dropping 19.7 cents to $4.230 and March falling 18.9 cents to $4.193. February crude oil shed 87 cents to $98.42/bbl.
Physical natural gas for delivery Tuesday vaulted higher Monday, fueled in large part by a number of capacity constrained points in New England. At the close of futures trading February had advanced 5.9 cents to $4.427 and March was higher by 4.6 cents to $4.382. February crude oil fell $1.03 to $99.29/bbl.
Deliveries of weekend and Monday gas were unchanged on average in Friday’s trading, with eastern and Northeast weakness for the most part offset by gains in the Midwest. At the close, January had fallen 2.6 cents to $4.407 and February was down 10.8 cents tgo $4.368. February crude oil added 77 cents, to $100.32/bbl, the first time oil has traded above $100 in two months.
Physical gas for Friday delivery slipped a few cents Thursday as outsized gains at New England points could not offset broader losses in the Midwest, Gulf Coast and California.
Physical natural gas for delivery Wednesday and Thursday overall fell sharply in Tuesday’s trading as traders scaled back purchases ahead of the Christmas holiday, though much of the decline came at four capacity-constrained points in New England.
Coming off a much warmer than normal weekend in which a number of eastern population centers welcomed the official start of winter with temperatures in the high 60s to low 70s, the return to more seasonable cold on Monday, with forecasts of more to come, saw the value of physical gas traded for Tuesday delivery increase at nearly all points across the country.
Demand for natural gas isn’t likely to spike unusually higher over the next three months, based on a forecast from Weather Services International (WSI) that calls for temperatures to average warmer than normal across much of the United States, with the exception of parts of the North Central and Northeast regions.
Physical natural gas for weekend and Monday delivery on average nationally was flat in Friday’s trading, hiding the fact that there were major weather-driven declines along the Eastern Seaboard and healthy gains at points positioned to move gas to the Midwest.