Pure fuel costs for near-term supply at regional buying and selling hubs throughout the US jumped because the market braced for a historic winter storm that’s poised to ship temperatures plummeting and enhance demand for the heating gasoline.
So-called money costs for fuel on the benchmark Henry Hub in Louisiana to be delivered over the weekend surged early Friday to $18.80 per million British thermal items, in accordance with merchants. That compares with $8.42 on Thursday.
Spot costs on the SoCal Citygate hub in California traded as excessive as $8 per million Btu as fuel volumes delivered through pipeline from the Permian Basin in West Texas to the West Coast have seemingly been decreased, merchants stated. That’s up from $4.42 on Thursday.
This week’s surge has been pushed by forecasts for below-normal temperatures throughout many of the nation, threatening to spice up fuel consumption and drain inventories. The freeze — significantly within the southern gas-producing states — has raised issues about water icing in pipelines, doubtlessly disrupting output beginning this weekend.
US pure fuel futures for February supply, in the meantime, rose for a fourth straight day. They had been up 6.3% to $5.362 per million Btu as of 9:22 a.m. in New York, heading for his or her greatest weekly achieve in data going again to 1990.
The shift in US climate forecasts got here days after hedge funds turned extra bearish on fuel on the finish of final week, leaving the market poised for a rally as merchants rushed to shut out these wagers. Fuel costs briefly climbed above $5.50 per million Btu on Thursday, a stage {that a} Citigroup Inc. evaluation on Thursday confirmed would wipe out all shorts.
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