US Natural Gas Prices Surge 20% on Colder Forecasts
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U.S. natural gas futures soared as the weather outlook for January shifted colder, raising demand prospects for the fuel used in heating and power generation.
Gas for February delivery rose as much as 20% in New York. That’s the most since the contract started trading 2012. Most-active futures climbed to the highest level in almost a year.
The National Weather Service expects a higher chance of colder-than-normal weather across the U.S. East and Midwest in its latest 8-14 day outlook. That would be an abrupt shift from what’s until now been a mostly mild fall and early winter in the U.S.
The much colder outlook is “creating a buying frenzy,” Dennis Kissler, an energy trader and analyst at BOK Financial, wrote in a note Dec. 30.
(Bloomberg)
Funds using algorithmic trading strategies have also changed their risk positions, from flat to net long, according to Stephen Roseme, managing member of Bridgeton Research Group LLC, which tracks trading activity.
Additional consumption for supplying liquefied natural gas exports is expected to add to overall demand in the coming period.
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