Natural gas futures fluctuate on weather, supplies

Natural gas futures traders continue to bide their time for the first cold snap or snowstorm of the year, as the key heating fuel fell again on Monday. Gas may be one of the most cyclical of all commodities, driven as it is by the demand for heating in the winter.Natural gas futures traders continue to bide their time for the first cold snap or snowstorm of the year, as the key heating fuel fell again on Monday. Gas may be one of the most cyclical of all commodities, driven as it is by the demand for heating in the winter.

On the New York Mercantile Exchange, Henry Hub natural gas futures for delivery in one month rose 1.9 cents percent to $3.712 per million British thermal units (MMBTUs), after earlier falling as low as $3.305 per million British thermal units. On the New York Mercantile Exchange, Henry Hub natural gas futures for delivery in one month rose 1.9 cents percent to $3.712 per million British thermal units (MMBTUs), after earlier falling as low as $3.305 per million British thermal units. 

"Until we get some dramatic weather, or some sort of disruption in supply, the market is developing a $3 to $4 range," Rich Ilczyszyn, a senior market strategist with Lind-Waldock, told the Wall Street Journal. "That's where we're going to be pinned.""Until we get some dramatic weather, or some sort of disruption in supply, the market is developing a $3 to $4 range," Rich Ilczyszyn, a senior market strategist with Lind-Waldock, told the Wall Street Journal. "That's where we're going to be pinned."

As the Journal points out, natural gas futures have rallied every winter since 2003, climbing above $6 per MMBTU.As the Journal points out, natural gas futures have rallied every winter since 2003, climbing above $6 per MMBTU.

That could still occur this year, but unusually high inventories could put a ceiling on the potential rise of natural gas futures.That could still occur this year, but unusually high inventories could put a ceiling on the potential rise of natural gas futures.

"In a nutshell, we have plenty of supply and nothing fresh or new about demand, which has been slack for two years plus," Peter Beutel, at the energy-advisory firm Cameron Hanover, wrote in a note to clients."In a nutshell, we have plenty of supply and nothing fresh or new about demand, which has been slack for two years plus," Peter Beutel, at the energy-advisory firm Cameron Hanover, wrote in a note to clients.

Of course, an unusually fierce winter or a storm in a major production region, like the Gulf of Mexico, could turn everything around.Of course, an unusually fierce winter or a storm in a major production region, like the Gulf of Mexico, could turn everything around.