Natural gas futures prices settled lower Feb. 20 but still remained above $6/MMbtu on the New York market after a weekly government report showed underground gas storage volumes stayed slightly higher than analysts had expected given this winter’s snowstorms and freezing temperatures.
The gas storage level has reached its lowest for any week in February since 2004, the US Energy Information Administration said. EIA reported a draw of 250 bcf for a total of 1.443 tcf in gas storage for the week ended Feb. 14 (OGJ Online, Feb. 20, 2014).
A harsh winter across the central and eastern US continues to trigger high demand for heating oil and natural gas to warm homes and businesses. Forecasters are calling for more freezing temperatures next week.
Crude oil prices on both the New York and London markets declined modestly on Feb. 20 after having climbed earlier in the week. The premium of Brent to US light, sweet crude for April delivered narrowed to $7.55/bbl in Feb. 20 settlements.
"We continue to view the current level in the spread as a potential equilibrium," said Tim Evans, energy markets strategist at Citi Futures. He said Brent prices await direction from Libya, where exports have been drastically reduced due to labor unrest.
The New York Mercantile Exchange March crude contract dropped 39¢ to settle at $102.92/bbl. The April contract was $102.75/bbl, down 9¢ for the Feb. 20 closing.
Heating oil for March delivery was up 3¢ to a rounded $3.18/gal. Reformulated gasoline stock for oxygenate blending for March delivery climbed 2.19¢ to a rounded $2.85/gal.
The March natural gas contract on NYMEX decreased 8.5¢ to a rounded $6.06/MMbtu. On the US spot market, the gas price at Henry Hub dropped to a rounded $5.92/MMbtu on Feb. 20, down 5¢.
In London, the April ICE contract for Brent gave up 17¢ to $110.30/bbl. The May contract was down 15¢ to close at $109.98/bbl. The ICE gas oil contract for March dropped $3 to $937.50/tonne.
The Organizational of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $106.79/bbl on Feb. 19, down 36¢.
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