| Subject: cold weather expected to hit the U.S. Midwest |
Author:
larry
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Date Posted: 02:41:57 01/24/07 Wed
oh gee the coldest weather to hit and longer than expected.
http://wiadomosci.onet.pl/1471308%2C10%2C1%2C0%2C120%2C686%2Citem.html
CALGARY (Dow Jones)--Natural gas futures rose Tuesday, with traders covering positions on forecasts of persisting cold winter in the U.S. Midwest, likely increasing demand for gas as heating fuel.
Front-month February natural gas futures on the New York Mercantile Exchange settled at $7.597 a million British thermal units, up 27.8 cents.
The last time the market closed higher was Dec. 14 at $7.673/MMBtu. Weather forecasts released Thursday suggested that the cold weather expected to hit the U.S. Midwest between Jan. 28 and Feb. 1 will now persist longer than previously expected. One model run by meteorologists at MDA's EarthSat Weather Group in Rockville, Md., forecasts "the coldest outbreak in years" for large parts of the U.S. between Feb. 2-6.
The expectations were bringing strength to the gas market, which could test $8.00/MMBtu in coming days, said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.
"The market will remain bullish in the near term until there's some evidence that the stubborn cold will shift," he said. "Until we get that, the price will hold up pretty well."
Meanwhile, private forecasters WSI Corp in Andover, Mass., predicted that temperatures from February through April will be warmer than normal. However, WSI said it would revise its forecast by week's because of the expected low temperatures in early February.
As well as the weather concerns, strength in the physical gas market is supporting the front end of the gas futures curve, while some strength is also spilling over into gas from crude futures, said a Calgary-based trader. Front-month crude futures settled at $55.04 a barrel, rising on cold weather and violence in Nigeria, after dropping to a 20-month low of less than $50 a barrel last week.
"Weather is the key to the strength in the gas market, but crude is having a little bit of an effect too," he said.
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