Nymex Natural Gas Rises to $11 on Higher Crude, Supply Concern

Natural gas rose to the highest in more than two years as oil advanced on supply disruptions, spurring prices of the heating and industrial fuel, Bloomberg reported.

Crude rose as BP Plc prepared to shut down a North Sea pipeline and violence and strikes crimped output in Nigeria. The furnace fuel also gained amid speculation supplies may fall short of the quantities needed to rebuild storage for next winter's heating needs.

``People are trying to make an association that natural gas and crude have a symbiotic relationship and their prices need to be closer,'' said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. ``There's been a notion prevalent for the last month that this gap has to close.''

Natural gas for May delivery rose 17.3 cents, or 1.6 percent, to settle at $10.963 per million British thermal units at 2:53 p.m. on the New York Mercantile Exchange. The price rose to $11.05 per million Btu in after-hours electronic trading, the highest intraday price since Dec. 30, 2005. The May contract is up 4 percent this week. Prices are 47 percent higher so far this year. The contract expires on April 28.

The contract for June delivery rose 15.8 cents, or 1.4 percent, to $11.101 per million Btu and is pulling the May price higher, said Rose.

Based on prices in the cash market, gas is valued at $11.27 per million Btu compared with $14.66 per million Btu for fuel oil, according to data compiled by Bloomberg. Heating oil at $23.88 per million Btu equivalent is more than double the price of gas.

``There's some pre-weekend short covering for natural gas,'' said George Ellis, a director in the energy derivatives group at BMO Capital Markets in New York. ``Natural gas looks very strong. Momentum is taking over and allowing this market to trade higher.''

Traders who are short heading into the weekend may be buying now to guard against having to purchase gas at higher prices should it surge before regular trading resumes on April 28. Short trades are bets that the price of a commodity will decline. Prices typically rise as those speculators who had sold contracts anticipating lower prices buy them back to protect gains or limit losses.

Gas has held above the nine-day moving average of about $10.605 per million Btu and unless it breaks below that, the fuel should continue higher, Ellis said.

Moving average is an indicator used by technical analysts. It shows the average value of a security or commodity over time. Chartists track the averages for clues on price direction.

Higher crude allows ``natural gas traders the luxury of paying attention to their own fundamentals,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut.

To rebuild supplies for next winter, higher prices are needed to either prompt additional exploration and production in the U.S. or to pull cargoes of liquefied natural gas from Asia and Europe, which pays more.

Inventories for the week ended April 18 gained 24 billion cubic feet to 1.285 trillion, the Energy Department said in a report yesterday. Stockpiles were 18 percent lower than a year ago and 1.9 percent below the five-year average, the department said.

The five-year average change for the same week of the year is an increase of 46 billion, according to the Energy Department.

Gas inventories fell to 1.234 trillion cubic feet on April 4, the lowest since May 2004, after reaching a record 3.545 trillion in November.

``I have a feeling we're going to make new highs,'' said Beutel. ``We're losing production from Independence Hub. Imports of LNG are lower and we're playing catch up to next winter, there are a lot of reasons to think this is still a bullish market.''

Flow of liquefied natural gas into the U.S. is below that of a year ago as Europe pays more for the fuel to build up inventories, investment bank Tudor, Pickering, Holt & Co. said.

U.S. LNG imports dropped to 900 million cubic feet a day in April from a daily 3.2 billion cubic feet a year earlier, Tudor analyst Stacy Nieuwoudt said in an e-mail yesterday. The New York June futures contract was $1.63 per million British thermal units below prices offered in the U.K. today for the same month, according to data compiled by Bloomberg.

LNG is super-cooled natural gas reduced to a liquid for transport by ships to markets not connected by pipeline.

The Independence Hub, a production platform in the Gulf of Mexico that was supplying about 900 million cubic feet a day, shut April 9 after a leak was discovered in a pipeline. Repairs may take as long as four weeks, Enterprise Products Partners LP, which owns Independence, said.

Despite events in Armenia, it's necessary to continue implementation of agreements on Nagorno-Karabakh -  Russian official
Despite events in Armenia, it's necessary to continue implementation of agreements on Nagorno-Karabakh - Russian official
Supplies of 'Iskander' missiles to Armenia must be stopped – Russian expert
Supplies of 'Iskander' missiles to Armenia must be stopped – Russian expert
Military coup attempt in Armenia - PM inviting supporters to Republic Square
Military coup attempt in Armenia - PM inviting supporters to Republic Square
Loading Bars
Latest
Turkey set to support Croatia's post-quake revival: Turkish FM
COVID-19 Update: 83,179 Kyrgyzstanis recovered
Georgia reports 248 coronavirus cases, 525 recoveries, 11 deaths
Iran's Gorgan-Mashhad railway to be built
Trade relations between Azerbaijan and Russian Ulyanovsk region expanding
Weekly review of Azerbaijani ICT sector highlights
UK's Sunak will set out plans to raise income tax by 6 billion sterling
Australia receives AstraZeneca vials as it ramps up vaccination drive
January 2021 value of mortgage loans in Azerbaijan grows in absolute terms
Kazakhstan adds 791 new COVID-19 cases
5.5-magnitude quake hits 81 km SW of Islay (Matarani), Peru
Iranian Minister unveils ports' infrastructure dev't plans
Turkey confirms 9,193 new COVID-19 cases, 2,693,164 in total
S&P Global affirms Georgia’s sovereign credit rating at ‘BB’
Razi COVID-19 vaccine to begin clinical trial: Minister
5 died after accident in northeast China chemical fiber plant
US regulator approves Johnson&Johnson coronavirus vaccine
Kazakhstan twofold decreases exports to Norway amid COVID-19
Iraq reports 3,543 new COVID-19 cases, 692,241 in total
5.3-magnitude quake hits 3 km SW of Point MacKenzie, Alaska
Qatar reports 460 new COVID-19 cases, 163,197 in total
Weekly review of highlights in Azerbaijani financial market
UK records another 7,434 coronavirus cases, 290 deaths
It is necessary to end deployment of Armenian armed forces on territory of Azerbaijan - Foreign Ministry
WHO reports over 420,000 new daily cases of COVID-19
Istanbul’s major Galataport project to go live in April
0.03% of pupils and 0.1% of school staff in Georgia confirmed with Covid-19 this week
Iran's Energy Exchange announces products to be on sale on February 28
Uzbekistan's largest share in formation of GDP falls on Tashkent
Azerbaijan's revenues from tea, coffee exports double in Jan.2021
Cargo movements in Iran's Khalij-e-Fars port increase
China conditionally approves one-shot recombinant COVID-19 vaccine
Stock gains power Buffett's Berkshire Hathaway to higher profit
More than 165,000 apply for Turkey’s most popular scholarship
Georgian Railway resumes passenger transfers
Kazakhstan reports value increase in all types of deposits
New road put into operation in Iran's Golestan Province
Azerbaijan sets up working subgroups to prepare 2021-2025 Development Strategy
Bahar Azadi gold coin price falling in Iran
Azerbaijan reports 172 more COVID-19 recoveries
Azerbaijan's Ministry of Finance to put up medium-term bonds for auction
Azerbaijan's banking sector ends January 2021 with profit
Foundation of several manufacturing enterprises laid in Iran's Qazvin Province
Uzbek-Korean JV to buy spare parts for metal detector via tender
USAID to promote start-up dev’t in Turkmenistan
President Aliyev: Any attempt to violate implementation of November 10th declaration will be very harmful for Armenia (VIDEO)
Iran reveals COVID-19 data for February 27
Bosnian TV channel visits liberated Azerbaijani Aghdam, reminds of Khojaly genocide
Azerbaijani police officers find ordnances left by Armenians in Khojavand (PHOTO)
Long-term energy demand impact of COVID-19 is modest
President Aliyev to Iranian reporter: Your question is a kind of an accusation (VIDEO)
New Zealand's largest city Auckland back to lockdown after COVID-19 case
Iran pins hopes on Swiss financial channel to purchase COVID-19 vaccines
Foreign journalists visit village where two-year-old Azerbaijani girl was killed by Armenians
Volume of cargo loaded, unloaded in Iran’s Chabahar port revealed
Weekly review of Azerbaijan's oil and gas sector
Eni Turkmenistan Ltd opens tender for catering, housekeeping services
Kazakhstan boosts imports of Switzerland-made products
Uzbek ministry, German Society for International Cooperation sign agreement
Uzbekistan, China expand mutual trade despite COVID-19
Georgia reports 373 new cases of coronavirus on Feb.27
Buy/sell operations at Iran Mercantile Exchange soar
Weekly review of Azerbaijani precious metals market
Baku Metro continues preparatory work for commissioning of new 'November' 8 station
Iran's exports to Russia increase
Uzbek-Korean JV to buy spare parts for pumps via tender
Kazakh airlines eye to launch several flights on Turkestan-Istanbul route
UNDP in Turkmenistan opens tender for services on seismic work
Volume of electricity generated by renewable energy power plants in Iran announced
Researcher talks monuments on ancient Azerbaijani lands vandalized by Armenians (PHOTO)
Uzbekistan reveals COVID-19 data for Feb. 27
Azerbaijan's MoD shares footage from Gubadly's Afandilar village (PHOTO/VIDEO)
Iranian currency rates for February 27
Remittances from Azerbaijan to Georgia show highest growth rate
Belarus considering possibility of supplying agricultural machinery to Turkmenistan
Turkmenistan’s Turkmenbashi Oil Refinery exceeds plan for kerosene production
Azerbaijani oil prices published
Kazakhstan's uranium mining company opens tender to acquire electro-technical materials
Issuance of construction permissions in Georgia down
Philippines extends partial coronavirus curbs in capital until end-March
Weekly review of Azerbaijani currency market
Kazakh gas supply company to attract equipment installation services via tender
Turkey's tourism industry puts hopes on safety measures for new season
Azerbaijani marketing platform plans to become regional player
Argentine health minister tests positive for COVID-19
Czech gov't declares new state of emergency over coronavirus
U.S. FDA advisors recommend approving Johnson & Johnson COVID-19 vaccine for emergency use
Increase in malware attacks makes cybersecurity more relevant than ever - Kaspersky Lab in Azerbaijan
South Korea vaccinates 18,000 to start ambitious COVID-19 campaign
US may announce new sanctions on Russia within weeks - White House press secretary
Founder of Indian Jet Airways eyes opening airline in Uzbekistan’s Namangan region
Saudi Arabia rejects U.S. intelligence report on Khashoggi's killing: statement
Israel registers 2,738 new COVID-19 cases, 769,971 in total
U.S. announces 'Khashoggi ban' for 76 Saudi individuals
Number of COVID-2019 cases across globe up by over 427,000 in past day
Slovenia confirms first case of coronavirus variant identified in S. Africa
UN Security Council adopts resolution on vaccination
UK records another 8,523 coronavirus cases, 345 deaths
Kazakhstan shows interest in supplies of Belarusian sugar, its manufacturing technology
Turkey reports 9,205 new COVID-19 cases, 2,683,971 in total
All news