Jan. 21 (Bloomberg) -- Natural gas gained in New York as a winter storm bringing heavy snow and frigid weather to the East Coast stoked demand for the heating fuel.
Gas rose as much as 2.8 percent as forecasters including MDA Weather Services said "bitter cold" would sweep the U.S. east of the Mississippi River through the end of January. A blast of arctic air colliding with Atlantic moisture will bring at least 6 inches (15 centimeters) of snow from Washington to Boston, according to AccuWeather Inc.
"The next 10 days of cold weather across the eastern half of the country put a bid in the market," said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. "The market is starting to look like it wants to knock on the door of two-and-a-half year highs."
Natural gas for February delivery advanced 9.4 cents, or 2.2 percent, to $4.42 per million British thermal units at 10:25 a.m. on the New York Mercantile Exchange. Volume was 59 percent above the 100-day average. The futures have climbed 24 percent from a year ago.
The premium of February to March futures widened 0.3 cent to 7 cents, the most since March 29. March gas traded 18.3 cents above the April contract, compared with 17.8 cents on Jan. 17. Floor trading was closed yesterday for the Martin Luther King Jr. holiday.
March $7.45 calls were the most active options in electronic trading. They were 0.2 cent lower at 0.7 cent per million Btu on volume of 1,500 at 10:29 a.m. Calls accounted for 67 percent of trading volume.
The U.S. will see a second southward surge of a polar vortex next week that will bring intense cold from the north- central states through the East Coast and the South, according to MDA in Gaithersburg, Maryland.
The low temperature in Manhattan will drop to 6 degrees Fahrenheit (minus 14 Celsius), 21 below normal, while Washington’s reading will be 19 lower than average at 9 degrees, AccuWeather in State College, Pennsylvania, said on its website.
About 49 percent of U.S. households use gas for heating, with the biggest users in the Midwest, followed by the Northeast, U.S. Energy Information Administration data show.