US GAS: Futures End Near 7-Week High On Northeast, Midwest Cold

NEW YORK (Dow Jones) - Natural gas futures rose Wednesday to their highest level in nearly seven weeks of speculation that a cold spell in early spring in much of the northern U.S. could increase demand for heating oil.
Natural gas for April delivery settled 8.1 cents, or 1.9%, higher at $ 4335 a million British thermal units on the New York Mercantile Exchange, the highest closing price for the contract close since 03 February.
A spring storm brought unusually cold temperatures in much of the northern U.S. and snow to parts of the Northeast and Great Lakes, and forecasters expect the cold will last until next week.
Private forecaster MDA EarthSat temperature is colder than normal in the Great Lakes through the Mid-Atlantic and Northeast through April 1. The weather generally lose its influence as the U.S. motor natural gas prices with mild spring weather arrives, but traders said the consensus on the current cold wave was too much for the market to ignore.
Meanwhile, traders and analysts surveyed by Dow Jones Newswires expect the Energy Information Administration reported Thursday that 5000 million cubic feet of gas was withdrawn from U.S. stocks last week, less than the average demand as mild weather cut.
The future of support Wednesday for the view that the cold during the next week to boost withdrawals season as energy producers are based on inventories, said Cameron Horwitz, an analyst at Canaccord Genuity.
"It seems that we get the gas out this week," said Horwitz. "The weather forecasts are end of next winter through. We can see a retreat "for the week ending April 1.
Stocks down to end the winter season about a withdrawal. 6 trillion cubic feet, far below estimates made at the beginning of what was a colder winter than expected.
Future had been under pressure during the final weeks of the view that a strong U.S. production would exceed demand with the arrival of spring, when less fuel is used normally.
But nervousness about the viability of nuclear energy and the tightening of oil stocks following the global crisis in Japan and a surprisingly large draw in U.S. inventories last week pushed prices higher.
"People were so short this market," said John Woods, a trader with JJ Woods Associates, referring to bets that prices would fall. "All I needed was a touch of optimism" to send traders rushing to invest their positions, he added.
The reference gas contract has advanced by 16% from the lows of this year on 4 March to Wednesday's close.

 
   FUTURES           SETTLEMENT         NET CHANGE 
   Nymex April         $4.335            +8.1c 
   Nymex May           $4.412            +8.1c 
   Nymex June          $4.477            +8.1c 
 
   CASH HUB            RANGE            PREVIOUS DAY 
   Henry Hub           $4.14-$4.27      $4.02-$4.14 
   Transco 65          $4.17-$4.24      $4.02-$4.16 
   Tex East M3         $4.53-$4.72      $4.35-$4.50 
   Transco Z6          $5.10-$5.68      $4.68-$4.96 
   SoCal               $4.20-$4.25      $4.09-$4.22 
   El Paso Perm        $4.08-$4.14      $3.95-$4.04 
   El Paso SJ          $4.03-$4.07      $3.90-$3.95 
   Waha                $4.10-$4.15      $3.97-$4.04 
   Katy                $4.14-$4.19      $3.99-$4.08 
 

(Source: http://online.wsj.com/article/BT-CO-20110323-712702.html)