WASHINGTON -- Natural gas prices jumped 9 percent to a new high yesterday and oil prices also climbed as cold weather across the United States raised jitters about increased demand for home-heating fuels this winter.
But some brokers said they were stunned by the market's apparent knee-jerk reaction to freezing temperatures and snow, chalking it up to speculative buying.
January natural gas futures surged as high as $15.10 per 1,000 cubic feet, before settling at $14.994, an increase of $1.294, or 9 percent, on the New York Mercantile Exchange. The previous closing high for the front-month contract was $14.338 on Oct. 25 and the previous intraday high was $14.75 on Oct. 5.
The rally in natural gas helped fuel the runup in oil prices. Light sweet crude for January delivery climbed $1.45 to settle at $60.66 a barrel on Nymex. In London, January Brent crude gained $1.69 to settle at $58.67 a barrel on the ICE Futures exchange.
A major winter storm was forecast for the Southeast and heavy snow was expected in the Northeast today, while temperatures in the Midwest were expected to warm.
While there is enough natural gas in storage in the United States for a normal winter, Ed Silliere, a Nymex trader at New York's Energy Merchant Intermarket Futures, said the early blast of frigid temperatures has made the market nervous about the possibility of a colder-than-normal winter.
But Mike Fitzpatrick, a broker at Fimat USA in New York, said yesterday's rally ''bears no reflection whatsoever to the fundamentals" of supply and demand and that the market was ''building toward a big bust."