FxNews—US natural gas prices jumped over 5% to $3.30 per MMBtu on Monday, nearing last week’s one-year high of $3.4. Forecasts of colder weather drive the surge and reduced production, prompting utilities to withdraw gas from storage sooner than usual.
US Gas Storage Levels Drop Unexpectedly
The Energy Information Administration (EIA) reported that gas storage levels fell by 3 billion cubic feet for the week ending November 15th. This decline was unexpected, as analysts had anticipated an increase of 5 billion cubic feet. The drop occurred because producers cut output the previous week due to relatively low prices.
Winter Chill Boosts Natural Gas Prices in the US
Weather forecasts indicate colder-than-normal temperatures on the West Coast and across most of the country, except the Gulf Coast. This increased demand for heating fuels contributes to rising natural gas prices.
In addition, supply concerns in Europe have pushed LNG (liquefied natural gas) feed gas flows to a 10-month high. Uncertainty over future Russian gas supplies is boosting Europe’s demand for LNG, which lifts natural gas prices in the United States.