US Natural Gas Prices Fluctuate Amid Extreme Cold Weather and Production Concerns
US natural gas prices continue to fluctuate between extreme cold weather and production concerns. Current conditions suggest that prices will continue to rise in the coming week. However, it is also possible to see a decline in prices as the cold weather starts to fade.
US natural gas prices have been fluctuating between extreme cold weather and production concerns. After a 4.7% loss in the previous session, prices rebounded to above $3/MMBtu after the EIA reported a larger than expected storage demand.
Government data showed that US facilities withdrew 140 billion cubic feet of natural gas from storage last week, above market expectations of a 119 bcf decline. Despite this, gas in storage remains 11.6% above seasonal norms.
However, meteorologists predict that extreme cold weather next week will push demand to a record high. This extreme cold could cause production to drop as oil and gas infrastructure freezes.
Production Concerns Drive Prices Higher
Production concerns are also driving prices higher. In Texas, the largest natural gas producer in the US, some production facilities are experiencing outages due to cold weather.
Moreover, Russia’s invasion of Ukraine is reducing natural gas supplies in Europe, pushing up prices.
What to Expect Next Week?
Meteorologists predict that the weather in the US will transition to colder than normal weather from January 13-22, followed by a return to warmer temperatures on January 23-24.
Therefore, natural gas prices are expected to continue rising next week. However, it is also possible to see a drop in prices as the effect of the cold weather starts to diminish.
