Natural gas climbs to four-year high on U.S. freeze

Natural-gas futures rose Monday to their highest level in about four years amid concerns that extremely cold weather in the U.S. would persist for at least another week.

February natural gas NGG14 +4.65%   rallied for a fifth day in electronic trading, spiking 21 cents, or 4.1%, to $5.40 per million British thermal units. The price marked the highest level since February 2010, according to FactSet data tracking the most-active contracts.

Prices jumped 45 cents, or 9.6%, to close at $5.182 per million British thermal units on the New York Mercantile Exchange.

A major winter storm hit much of the Northeastern U.S. last week, sending temperatures below freezing and causing inventories for natural gas to fall. The U.S. Energy Information Administration reported Thursday that natural-gas supplies dropped 107 billion cubic feet for the week ended Jan. 17.

Meanwhile, a forecaster at the U.S. National Weather Service suggested that the cold-weather now covering much of the country would stay for at least another week.

Many analysts believe the freezing weather may continue to drive demand higher and cause the stockpiles to drop further this week.

“There still seems to be plenty of cold in front of the market, with above-average storage withdrawals [of natural gas] to persist at least into early February,” said Timothy Evans, an energy strategist for Citi Futures.

Meanwhile, March crude CLH4 +0.07%   inched up 5 cents to $96.69 a barrel in electronic trading. Prices rose 2.4% last week on the Nymex, with the March contract losing 0.7% on Friday.

Evans said the start-up of TransCanda’sCA:TRP -1.16%   TRP -1.02%  Gulf Coast pipeline on Wednesday would increase the demand for crude and continue to provide some support for oil prices.

Elsewhere, March Brent crude oil UK:LCOH4 -0.23%   declined 28 cents, or 0.3%, to $107.60 a barrel, and February gasoline RBG4 -0.18%  retreated by 1 cent, or 0.3%, to $2.66 a gallon.