NEW YORK — Natural gas prices jumped Thursday after the U.S. government reported that supplies fell by the largest amount ever for this time of year as frigid weather chilled parts of the Canada and the U.S. Midwest and Northeast.
Meanwhile, benchmark crude for January delivery dropped a penny to settle at US$72.65 a barrel. In London, Brent crude for February delivery fell 92 cents to settle at $73.37 on the ICE futures exchange.
A wintry mix of rain and snow kept heaters cranked on high, consuming large stores of natural gas in some of the country’s largest markets like Chicago.
Still, the amount of gas in storage remains 14 per cent above the five-year average for this time of year.
The Energy Information Administration said the U.S. supply of natural gas dropped by 207 billion cubic feet last week, the most ever for this time of year, according to analyst Stephen Schork.
“It was brutally cold,” Schork said. “People have been saying for so long that natural gas is due for a rally and they’ve been wrong all year long. But with a big draw, I expect prices to move higher.”
The natural gas contract for January delivery climbed 30.6 cents, nearly six per cent, to settle at $5.768 per 1,000 cubic feet on the New York Mercantile Exchange.
Natural gas prices had slumped all year as the economy struggled to pull itself from recession. Supplies finally started falling this month, but only after underground storage caverns were crammed to near capacity.
Energy prices tend to rise when the weather cools, and this year is no different. Natural gas prices have doubled since September, but they’re only slightly more expensive than a year ago.
In other Nymex trading in January contracts, heating oil fell less than a penny to settle at $1.9574 a gallon while gasoline fell 2.19 cents to settle at $1.852 a gallon.