US natural gas futures rose to their highest level in almost 17 months as colder-than-normal weather boosted demand. Prices have closely tracked shifting weather forecasts in recent weeks as traders try to gauge the impact of shifting forecasts on late-winter heating demand.
On the New York Mercantile Exchange, natural gas for April delivery rose 7 cents, to $3.94 per million British thermal units. Last week, natural gas prices rose 6.1 percent, the fourth consecutive weekly advance.
A larger-than-expected drawdown from winter inventories last week also managed to keep momentum to the upside.
The US Energy Information Administration said that natural gas storage in the US in the week ended March 8 fell by 145 billion cubic feet (Bcf), compared to expectations of a decrease of 134 Bcf.
Total US natural gas storage stood at 1.938 trillion cubic feet (Tcf) as of last week, 18.5 percent below levels this time last year, but still 11.4 percent above the five-year average.
Statoil (NYSE:STO), along with joint venture partner ExxonMobil (NYSE:XOM), announced that it has discovered at least 4 Tcf of natural gas offshore in the Tangawizi-1 well. That brings the total reserve estimate to as high as 17 Tcf, the company said.
Tom Dodson, vice president of exploration at Statoil, confirmed that the company has completed five wells in Tanzania in the last 15 months and that more are planned for this year.
Meanwhile, Qatar, the emirate with the third-largest global reserves of natural gas, found a deposit with 2.5 Tcf of natural gas — its first discovery since uncovering the world’s largest gas field 42 years ago.
State-run Qatar Petroleum plans to develop the reservoir in a 544-square-kilometer area called Block 4N off the Persian Gulf state’s northern coast.
“We will start production, God willing, in the next few years,” from Block 4N, Mohammad Bin Saleh Al Sada, Qatar’s energy minister, told reporters. “We have already started planning and looking at different engineering options.”
Obama’s recent staff appointments, including the new head of the Environmental Protection Agency (EPA) and the new US Energy Secretary, may give a boost to the natural gas industry, according to a report by Bloomberg.
Obama picked Ernest Moniz, a Massachusetts Institute of Technology scientist, for US energy secretary and Gina McCarthy, a longtime environmental regulator, to head the EPA.
“They’re going to be making sure that we’re investing in American energy, that we’re doing everything that we can to combat the threat of climate change,” Obama said at a White House ceremony.
In their current jobs, both individuals have supported natural gas.