Hot Commodities: Natural Sees Wild Spike As US Weather Fuels Demand Concerns

3 Feb 2022 , 12:58 PM

The US Natural Gas futures fell today after spiking around 15% in last session. The market focussed on near term weather patterns in the US and the benchmark Natural Gas futures soared after breaking above $5 per mmbtu mark. The counter hit a two month high of $5.70 per mmbtu before moderating. There is a likelihood of intense freeze returning in mid-February after recent cold blast, intensifying concerns about tight supplies of the commodity used as heating and power-plant fuel. The US Energy Information Administration or EIA has already noted in a latest update yesterday that starting in early January, colder-than-normal temperatures in the Midwest and Northeast United States have led to more natural gas demand for space heating, while LNG exports have remained at elevated levels. Net withdrawals from storage exceeded the five-year average in the first three weeks of January by 25%, bringing storage inventories to within 1% of the five-year average. Prices fell after the wild spike in last session though and currently the counter is quoting down 4.50% at $5.20 per mmbtu.

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