MARKET WATCH: Colder weather boosts natural gas prices

Natural gas futures prices continued to rise, boosted by colder weather in the US. Weather forecasts for the next 2 weeks call for temperatures to remain cold for the northern part of the country, said analysts with Barclays Research.

Natural gas futures prices continued to rise, boosted by colder weather in the US. Weather forecasts for the next 2 weeks call for temperatures to remain cold for the northern part of the country, said analysts with Barclays Research.

“Well freeze-offs have had an especially large effect on production this winter season so far: according to sample flow from Bentek, production dropped more than 2 bBcfd compared with pre-freeze-off levels in early December,” observed Barclays Research analyst Shiyang Wang. “Although production is recovering, as of [Dec. 12] output remained curtailed in the Rockies, Texas, and other states in the southwest. Production should recover from freeze-offs, as temperatures in the west and south are due to become milder in the forecast period,” Wang said.

The January natural gas contract on the New York Mercantile Exchange increased 7.2¢ on Dec. 12 to settle at a rounded $4.41/MMbtu. On the US spot market, the gas price at Henry Hub, La., was a rounded $4.40/MMbtu, jumping 17.3¢.

The NYMEX January crude contract edged up 6¢, closing at $97.50/bbl. The February contract rose 10¢ to settle at $97.82/bbl.

Heating oil for January delivery declined 4.11¢ to settle at a rounded $2.98/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for January delivery dropped 2.63¢ to a rounded $2.64/gal.

In London, the January ICE contract for Brent crude oil dropped $1.03, closing at $108.67/bbl. The ICE gas oil contract for December was unchanged from Thursday at $932/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes closed at $106.96/bbl on Dec. 12, gaining 15¢.

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