Natural gas futures advanced in New York on anticipation demand for the industrial fuel will rebound after the U.S. economy expanded in the fourth quarter at the fastest pace in six years.

A recovery at factories will help to lift use of natural gas, which
relies on industry for 29 percent of consumption. The economy expanded
5.7 percent in the fourth quarter, according to a Commerce Department
report. Forecasters also predicted cold weather may linger in the
Midwest and East.

“Gross domestic product is helping a bit and we’ll probably get a
bounce,” said Tom Orr, director of research at Weeden & Co., a
brokerage in Greenwich, Connecticut. “It was also very cold here this
morning and the forecasts will probably get a little chillier.”

Natural gas for March delivery rose 11.7 cents, or 2.3 percent, to
$5.255 per million British thermal units at 11:19 a.m. on the New York
Mercantile Exchange. The March contract had fallen 11 percent this week
to a seven-week closing low through yesterday. Gas futures have dropped
5.7 percent this month.

Industrial demand for gas declined 9.8 percent through the first 10
months of 2009 with the worst recession since the 1930s cutting
purchases by steel mills, chemical plants and other large
manufacturers.

The economy was forecast to grow at a 4.7 percent annual pace in the
fourth quarter, according to the median estimate of 84 economists in a
Bloomberg News survey.

Demand Boost

“If you have greater-than-expected growth, then you’ll likely have
greater-than-expected demand,” said Cameron Horwitz, an analyst at
SunTrust Robinson Humphrey Inc. in Houston. “The economy fell off a
cliff last year and that had a massive feedback into gas demand.
Hopefully we’ve repaired that and are back on track to continue
growing.”

SunTrust Robinson anticipates industrial gas consumption will rise 5 to
6 percent in 2010, based on the U.S. economy expanding 2.5 percent, he
said.

Cold weather will cover the eastern half of the U.S. now through Feb.
2, according to MDA Federal Inc.’s EarthSat Energy Weather of
Rockville, Maryland. Below-normal temperatures, which yesterday were
predicted to begin fading later next week, will now hang on along the
Eastern Seaboard, EarthSat said.

EarthSat also eliminated from its 11-to-15-day forecast a prediction
made yesterday of above-normal temperatures for the eastern two-thirds
of the U.S. EarthSat is now predicting normal winter weather for most
of the country Feb. 8 to Feb. 12.

Economic Optimism

The GDP report “will inject a degree of optimism into an environment of
general skepticism about the pace and sustainability of recovery and
may lift prices temporarily,” Michael Fitzpatrick, vice president of
energy at MF Global in New York, said in a note to clients.

He said a “few days of cold this late in the season” may push prices beyond $6.

Other economic reports also signaled demand may begin to pick up for natural gas.

Companies in the U.S. expanded this month at the fastest clip in more than four years.

The Institute for Supply Management-Chicago Inc. said today its
business barometer climbed to 61.5, the highest level since November
2005, from 58.7 last month. Readings greater than 50 signal expansion.

Confidence among U.S. consumers rose to the highest level in two years.
The Reuters/University of Michigan final index of consumer sentiment
rose to 74.4 from December’s 72.5. The figure exceeded a preliminary
reading for January of 72.8.

Source: Bloomberg

Search to find what you want

• Natural Gas Falls on Speculation U.S. Supplies Sufficient for the winter

    Natural gas futures fell for the first time in three days in New York on speculation supplies will be ample to meet U.S. heating needs this winter.

• U.S. Weekly unchanged burn coal – Genscape

    U.S. coal use last week was unchanged from the week before as frigid weather eased, but coal consumption dropped less than power demand, Genscape said

• If oil from 15-month high on forecasts for warmer weather

    Crude oil fell after touching a 15- month high on forecasts that cold weather in the eastern U.S. will abate this week, curbing demand for heating fuel.

• Oil falls below $ 80 in Asian trade

    World oil prices dropped below $80 a barrel in Asian trade Wednesday mainly on increase in US stockpiles amid reports of China’s efforts to remove huge liquidity from its economy.

• U.S. coal-burning flat after week – Genscape

    U.S.

• Three ports reopened after bad weather

     Qatar yesterday reopened its three main exporting facilities after they were shut down over the weekend due to poor visibility. But sources expect another closure in coming days as forecasts indicate continued bad weather.   Qatar and other parts of the Gulf have been experiencing an unprecedented dusty weather for the last

• Oil, poised for the best year in a decade, profits from Cold Weather

    Crude oil rose in New York, heading for its biggest annual gain since 1999, as cold weather in the U.S. sent heating oil costs higher. Oil touched a six-week high of $80 a barrel, extending its rally to a seventh day, the longest since October.

• Genscape U.S. burn coal rises 4 percent for the week

    U.S. coal consumption rose 4 percent over the previous week and was 7 percent greater than the same week last year, the third weekly uptick in a row, Genscape said Friday. But the outlook for miners is still somewhat dodgy, Genscape said. In the populous East, consumption for the week ended

• U.S. energy company to monitor storms in the Gulf

    U.S.

• Natural Gas Advances as accessories decline more than forecast

    Natural gas futures soared in New York to their highest level in almost a year after a government report showed that U.S. stockpiles fell more than analysts estimated.

• Oil price rises from seven-week low on More Storms Forecast for U.S.

    Oil rose for the first time in four days as the U.S. mid-Atlantic region braced for a new winter storm in coming days and dug out from a weekend blizzard. Crude rebounded from a seven-week low after the National Weather Service issued storm warnings from Utah to New Jersey and

• Hull s new all-weather terminal acquires first customer

    Associated British Ports (ABP) Port of Hullâ??s recently re-branded All-Weather Terminal has completed the handling of its first bagged fertiliser shipment on behalf of Helm Fertilizer. Read at Hull’s new all-weather terminal handles first customer

• U.S. coal by 0.5 PCT, weak demand – Genscape

     Coal supplies at U.S. power plants grew 0.5 percent this week from last week and are 28 percent greater than the same week of 2008 amid unusually feeble summer demand, Genscape said Tuesday. Electric companies had 176.9 million tons of coal stockpiled, compared with 176.1 million tons reported last Tuesday and

• Weather slowing U.S. coal production, Alpha Says

    U.S. coal companies will probably say in their next earnings calls that the weather disrupted production just as demand climbed, Alpha Natural Resources Inc. Chief Executive Officer Kevin Crutchfield said.

• Coal May Advance 20% on demand from China, German Bank Says

    Benchmark coal prices, already at a 14-month high, may advance about 20 percent in the next several quarters because of demand from China and other Asian nations, Deutsche Bank AG said. China, the world’s biggest coal consumer, may be forced to shut 11 percent of power generators on its main