Energy - - Dec 29,2016
The futures of natural gas have reached its highest price in the last two years; the advancing cold season is expected to boost the demand as reserves slump.
Since December 2014, the January natural gas futures contract has gained up to 4.5 percent for resting at $3.930 per million British thermal units. The contract got expired on Wednesday, and the fresh front-month contract for the month of February also rose up significantly, reaching $3.89 million British thermal units.
The Energy Information Administration might soon report that storage has decreased by about 220 billion cubic feet of gas for the previous week which ended on 23rd December. According to Dow Jones, if this report comes true, it directly indicates that the gas in storage which is estimated at 3.375 trillion cubic feet, would be close to 10 percent below as compared to last year's level.
As per reports, natural gas has surged by 11 percent in three sessions and has acquired a high by 68 percent for this particular year.
The manager of market research at Tradition Energy, Gene McGillian said that, "We're up 65 cents in less than two weeks” and this rise is surely assisted by the return of the cold season.
Asian natural gas prices are contributing majorly to this global boost. China’s state oil and gas majors are ready to import record levels of liquefied natural gas (LNG), trusting on the robust demand during the cold months.
As per trade flow data, 7.33 million cubic metres (mcm) of LNG, which is equivalent to 3.33 million tonnes, is directly been delivered to China this month. Out of this stated quantity, 10 cargoes are from Qatar.
John Kilduff of Again Capital said the natural gas market has experienced a bigger push from the current forecasts which highlight colder temperatures in most parts of the U.S.