Natural Gas prices closed Friday with an 8.48% gain, registering their best week in almost two months, as forecasts for slightly higher heating demand and colder weather in Europe and the US boosted prices.
Refinitiv, the data provider, forecast average U.S. gas demand, including exports, would increase from 112.0 bcfd this week to 112.8 bcfd in the coming week as the weather turns seasonally colder and homes and businesses use their heaters more.
Robert DiDona of Energy Ventures Analysis said:
“With colder weather coming up, traders are out there saying ‘Okay, we can buy,’
“The market has largely been bouncing back and forth in a small range, and then we finally got some short-covering on a thin day.”
Indeed in a thin trading week dominated by the Thanksgiving holidays in the US, Natural Gas got the attention of those trading as both stocks and other commodities saw sizeable losses.
Global Reliance on Natural Gas
The spike in the price of Natural Gas comes as the world becomes more reliant on the commodity. In the US, natural gas production in the world’s largest economy surged to over 95 Bcf/d Nov. 24, hitting a near two-year high.
Over the last few months, natural gas prices have hit record highs as utilities around the world battled for Liquefied Natural Gas (LNG) cargoes so that extremely low stockpiles in Europe could be replenished as well as meeting the near-insatiable demand coming from Asia, where shortfalls in energy have caused power blackouts in China, the world’s second-largest economy.
Meanwhile, in Europe, an energy crunch still remains despite the assistance of Russia, whose supply line is helping keep investors in natural gas in a bullish mode.
