NEW YORK: US natural gas futures rose on Tuesday, supported by expectations of higher demand in the coming weeks due to colder weather and record gas flows to liquefied natural gas export plants.
Front-month gas futures for February delivery on the New York Mercantile Exchange traded 16.1 cents higher, or 4percent, at USD4.15 per million British thermal units.
“January’s now coming around the corner and typically in January you’re going to get some cold weather,” said Thomas Saal, senior vice president for energy trading at StoneX Financial.
Saal added that the difference between the February contract and January settlement price also contributed to market activity, as traders sought to close the gap.
The January gas futures contract settled 7.4 percent higher at USD4.69 per mmBtu on Monday.
Meteorologists forecast a drop in temperatures nationwide through January 13, with Heating Degree Days rising from 412 on Monday to 439 on Tuesday, exceeding the near-normal level of 394. HDDs measure energy demand to heat buildings.