January 29, 2014
Natural gas surged to a four-year high in New York as forecasts for tumbling stockpiles during a frigid winter prompted the strongest rally in 19 months.
Gas jumped 10 percent, the biggest percentage gain since June 14, 2012, on the last day of trading for February futures. WSI Corp., an Andover, Massachusetts-based forecaster, said the weather may be colder than usual in most of the contiguous U.S. from Feb. 3 through Feb. 7. A government report tomorrow may show that stockpiles slid 231 billion cubic feet last week, compared with a five-year average drop of 162 billion, according to the median of 15 analyst estimates compiled by Bloomberg.
“It looks like a short squeeze,” said Aaron Calder, an analyst at Gelber & Associates in Houston. “We usually see a flurry of activity toward the end of expiration day, but this is kind of crazy. Traders are pricing in a very cold February, stronger storage withdrawals and concerns about low inventory levels at the end of the winter.”