03.03.201406:28:29UTC+00Natural gas advance on second day

Natural gas futures gained on the second day despite speculation a winter storm that surge from the US Midwest to Northeast will amplify heating demand and as Russia’s irruption into Ukraine hyped geopolitical tension.

Futures for delivery in April escalated 2.8% to $4.736 per million British thermal units on the New York Mercantile Exchange and were trading at $4.722 at 10:36 a.m. (Singapore time). The contract profited 2.2% at $4.609 on Feb. 28, hitting a four-day losing streak. The volume of all futures traded was around 28% above the 100-day average.

A weather system inducing ice and snow thorughout the Tennessee and Ohio valleys will move toward the US East Coast, said the National Weather Service. Strong cold will continue over the upper Midwest and a major winter storm is predicted for the central and eastern part of the country, it added.

Gas and oil futures are retreating after Russia took over Ukraine’s Crimea region. The standoff heightened as the former Soviet state stationed its forces on combat preparedness and hundreds of unidentified gunmen enclosed a Crimean army base.

Brent crude gained $2.17 or 2%, to $111.24 per barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate oil went up 2% to $104.65 in electronic trading in New York. Ukraine is the main channel for natural gas supplies to Europe from Russia, the world’s biggest energy exporter. Wholesale gas increased in January 2009 following the government in Moscow held up pipeline deliveries despite a conflict about prices and transit terms.

US gas inventories summed 1.348 trillion cubic feet in the week ended on February 21, the lowest since 2004, as seen in the Energy Information Administration. Stockpiles were at a record deficit of about 35% to the five-year average, said the Energy Department’s statistical bureau.