US natural gas prices surge amid colder weather forecasts
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US natural gas prices surged more than 5% to $3.3/MMBtu on Monday, approaching the one-year high of $3.35 reached last week.
US natural gas prices surge amid colder weather forecasts
This increase was driven by forecasts of colder weather and lower production, prompting utilities to begin the storage withdrawal season earlier than usual. According to EIA data, gas storage dropped by 3 billion cubic feet in the week ending November 15, contrary to expectations of a 5 billion cubic feet build. This marked the first decline of the season, as low prices in the prior week led producers to reduce output.
Weather predictions
The latest forecasts predict colder-than-usual temperatures on the West Coast and much of the country, excluding the Gulf Coast. Meanwhile, supply concerns in Europe ahead of the year-end drove LNG feed gas flows to a 10-month high, a trend likely to continue as uncertainty over Russian gas supplies increases Europe's demand for LNG, further boosting US natural gas prices.
