US spot natural gas prices mixed; NE up on cold weather

Tuesday, 01 January 2013 04:40

Posted by Abdul Ahad

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NEW YORK: US spot natural gas prices were mixed on Monday, but the Northeast saw strong gains as cold weather continued to drive heating demand.

Temperatures in Boston, New York and Chicago remained in the 30s Fahrenheit (near zero Celsius) on Monday and were expected to fall further as the week goes on, forecasters said, helping to push prices in some areas to two year highs.

In New York, a large consuming region with supply constraints that make it prone to price spikes, gas for delivery through Wednesday on the Transco pipeline at the citygate rose by $6.29 per million British thermal units (mmBtu) to $16.88, it's highest since January 2011. Gas in New York earlier rose as high as $18.

Prices in Chicago were 9 cents higher at $3.58.

Elsewhere in the Northeast, gas on the Algonquin pipeline in New England hit a high of $18, while Iroquois prices rose above $16, according to figures provided by ICE.

Prices at the US benchmark delivery point at Henry Hub in Louisiana rose by 3 cents to $3.43. Hub prices are up 46 cents from the beginning of the year. Early trades on Monday at a 1-cent premium to futures, up from a 2-cent discount on Friday.

The US Henry Hub spot natural gas price for 2012 averaged $2.77, a 13-year low, as high production levels and weak demand weighed on prices.

In futures, February New York Mercantile Exchange natural gas was trading 10 cents, or nearly 3 percent, lower at $3.369 per mmBtu, pressured by milder weather expected next week.

Center>Copyright Reuters, 2012