Natural gas shoots up as powerful winter storm blasts U.S.
On the New York Mercantile Exchange, natural gas futures for delivery in February traded at USD4.316 per million British thermal units during U.S. trading, up 2.02%.
The commodity hit a session high of 4.332 and a low of 4.215, with support seen at 4.215, the earlier low, and resistance seen at 4.471, Monday's high.
The February contract settled down 4.45% lower on Tuesday to end at USD4.230 per million British thermal units.
According to the U.S. National Weather Service and private weather forecasters, parts of southern New England into New York State, Pennsylvania, Ohio and Indiana may experience periods of heavy snow with blustery winds through early Friday.
The NWS predicted as much as eight inches of snow will fall in New York City, while Boston is expected to see up to 14 inches. Wind gusts could reach speeds of 45 miles per hour, and many areas will see temperatures 20 to 30 degrees below normal.
Colder-than-average winter temperatures increase the need for gas-fired electricity to heat homes and businesses, boosting demand for natural gas. The heating season from November through March is the peak demand period for U.S. gas consumption.
U.S. supply levels also remained in focus. Total U.S. natural gas storage stood at 3.071 trillion cubic feet as of last week, approximately 16% below last year's unusually high level and nearly 9% below the five-year average for this time of year.
Early withdrawal estimates for this Friday's storage data range from 110 billion cubic feet to 150 billion cubic feet, compared to a drop of 126 billion cubic feet during the same week a year earlier. The five-year average change for the week is a decline of 121 billion cubic feet.
Nymex natural gas prices have been well-supported in recent weeks, as chilly early winter weather helped drive prices to a two-and-a-half year high of USD4.578 on December 23. Nymex gas prices ended 2013 with a gain of nearly 22%, the biggest annual increase since 2005.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in February were down 2.55% and trading at USD95.91 a barrel, while heating oil for February delivery were down 2.05% and trading at USD3.0025 per gallon.