Propelled by worries over tight supplies and near-term cold weather forecasts, natural gas futures prices reached a record high Wednesday for the second time this week and closed around four times higher than a year ago.
On the New York Mercantile Exchange, the January natural gas contract rose to $8.80/Mcf before settling at $8.485/Mcf. A year ago the contract closed at $2.695.
The American Gas Association said natural gas supplies, as of the week ended Dec. 1, fell by 73 bcf to a total of 2,429 bcf. The AGA reported supplies are 503 bcf below the year-ago level. During the same period a year ago, supplies fell 69 bcf.
Gas supplies in storage declined 11 bcf in the producing region; 57 bcf in the consuming region east; and 5 bcf in the consuming region west. The drawdowns left the producing region and the consuming region west 64% full, compared to 65% a week earlier, and 88% and 89%, respectively a year ago.
The consuming region east was 81% full, compared to 85% the week before, and 92% a year ago.
Analysts are predicting the US could end the winter season with record low amounts of gas in storage. Raymond James & Associates Inc. analyst Marshall Adkins says exceptionally warm winters the past four winters have masked the strong economic growth that has occurred in the US during the past 5 years.
But the AGA said the consuming region east, the most heating-load sensitive region, has ended the winter season as little as 9% full.
