Natural gas futures advanced on Monday on forecasts of colder-than-normal weather patterns that are expected to spur demand for the heating fuel. Cold Arctic air may clamp down on the US East Coast and Midwest next week, according to a number of US-based weather agencies.
Matt Rogers, president of Commodity Weather Group, noted that computer models show temperatures across the regions will be 5 degrees Fahrenheit (2.8 Celsius) below average from January 19 to 23.
Gas prices have closely tracked weather forecasts in recent weeks as traders attempt to gauge the impact of shifting forecasts on winter heating demand.
Natural gas for February delivery rose 7 cents, rising to $3.39 per million British thermal units on the New York Mercantile Exchange on Monday.Yet even after reaching a 12-month high in November, natural gas futures have since fallen 19 percent. US gas inventories totaled 3.316 trillion cubic feet (Tcf) in the week ended January 4 — that's 10.7 percent above the five-year average for the period, according to the US Department of Energy A recent report from Business Insider states that China's ongoing smog problem could eventually lead to a natural gas revolution in the county. It notes that while Beijing's smog problem has existed for some time, the situation seems to be getting worse. China currently obtains 70 percent of its energy from coal, while natural gas contributes only 4 percent of energy output — something many within the country are looking to change, according to analysis from the EIA. Encana's (TSX:ECA) temporary CEO will not roll out a new strategy for the struggling company — a move that has left investors pondering how the natural gas producer plans to pull itself out of its long-term slump. Clayton Woitas, an Encana director, took over as interim CEO last week after Randy Eresman suddenly announced his retirement.