Natural gas prices hit fresh high on cold snap

NEW YORK — Natural-gas prices surged to an all-time high Tuesday, as cold weather in the United States and ongoing disrupted production in the Gulf of Mexico caused traders to worry that supplies of home-heating fuels will be tight this winter.

Nymex natural gas rose to an all-time record of $15.78 per 1,000 cubic feet Tuesday before easing back to $15.38 in afternoon trading, up 53.9 cents from Monday’s settlement price.

“The last thing consumers needed to have happen is a cold snap early in the season,” said John Kilduff, analyst at Fimat USA, noting that temperatures have been well below normal in many parts of the country. “With a quarter of natural gas off-line in the Gulf, it’s just stoking the winter supply fears.”

By Wednesday, a storm will bring snow to the upper Midwest, while an ice storm will move up the east coast by Thursday, according to Accuweather forecasters. December has been colder than usual so far, and many forecasters are saying below-average temperatures will persist throughout the winter.

Natural gas is most commonly used to heat homes in the Midwestern states, while heating oil is most commonly used in the Northeast.

Kilduff predicted that the price of natural gas could rise as high as $20 per 1,000 cubic feet by the middle of January.

According to Francisco Blanch, senior energy analyst at Merrill Lynch, natural gas prices are trading above heating oil prices on a calorie-value equivalence basis, a rare occurrence over the past 15 years.

Nymex heating oil gained 6 cents to $1.8325 a gallon Tuesday, while gasoline was little changed at $.6460 a gallon.

Crude-oil prices held above $61 a barrel, after the International Energy Agency predicted that global oil demand growth will recover next year. Oil prices also were supported by OPEC’s decision Monday to keep its production steady at record levels for now but to meet next month to consider reducing output.