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NYMEX February gas closes 10 cents higher at $2.981/MMBtu

https://www.chemnet.com   Jan 28,2015 Platts
The NYMEX February natural gas futures contract rose 10 cents Tuesday to settle at $2.981/MMBtu as participants covered short positions and the market gained some strength from cold weather in the US Northeast.

As the February futures contract expires Wednesday, options trading ends Tuesday, which Aaron Calder, Gelber & Associates analyst, said lends support to higher futures prices.

"Technical resistance at $3 is weakened today by a large amount of open put options at the strike price," said Aaron Calder, Gelber & Associates analyst, in an email. "Those who sold puts have an incentive to buy up the contract in order to avoid paying out."

The weather was also a factor in Tuesday's price strength, Calder said.

"Colder northeastern temperatures and the promise of more to come are dragging up cash prices, and futures are coming along for the ride," Calder said. "The blizzard hit the East Coast today. Early reports suggest it will not [be] as bad as doomsayers predicted in New York City, but there's two feet of snow on the ground in Boston, and the storm has yet to run its course."

The Weather Channel forecasts snow over the next 48 hours for the Great Lakes region, the Northeast, east-central California and the northern Rockies. The Weather Channel forecasts Wednesday's lows to be 30 degrees Fahrenheit or lower as far south as Atlanta and as far west as St. Louis and Minneapolis.

Kyle Cooper, principal and analyst at IAF Advisors, said the weather was a bigger factor than short-covering in Tuesday's price increase.

"It might be ... a little bit of each," Cooper said. "I would call it more on account of the weather than short-covering. It really was much colder."

Weather forecaster WSI said Tuesday's "11- to 15-day period forecast depicts more below-average temperatures over the eastern half of the nation and above-average [temperatures] over the West" into the northern and central Great Plains. The colder region extends south to cover most of Texas and Florida, and north to include the Great Lakes region and Maine.

The February gas contract traded Tuesday in a range of $2.888-$3.005/MMBtu.

The NYMEX settlement is considered preliminary and subject to change until a final settlement price is posted at 7 pm (0000 GMT Wednesday).
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