NEW YORK - Natural gas climbed to its highest price in almost 17 months in New York on speculation that a cold start to spring will buoy demand for heating fuels.
Gas rose as much as 2.4 percent as MDA Weather Services predicted below-normal temperatures will linger in most of the lower 48 states through April 1. The futures have rallied 25 percent from a one-month low on Feb. 15 as unusually cold weather helped reduce a stockpile glut.
“It doesn’t look like this rally is done yet,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Conn. “The next two weeks they are calling for below-normal temperatures. We are getting early reports we could see three more weeks of withdrawals. In this push up to $4 we have basically seen a lot of shorts run out of the market.”
Gas for April delivery jumped 7.2 cents, or 1.9 percent, to $3.944 per million British thermal units at 9:20 a.m. Monday on the New York Mercantile Exchange after rising to $3.965, the highest intraday price since Oct. 31, 2011. Trading volume was more than double the 100-day average for the time of day. Prices have climbed 18 percent this year.
“We see increased upside risk to our price forecasts of $3.75 per million Btu for the second and third quarters of 2013 and $4.25 per million Btu for 2014,” Goldman Sachs Group Inc. analysts led by Johan Spetz in New York said in an emailed research note.