With colder weather forecast over the coming weeks after frigid conditions sent household heating demand surging, natural gas has numerous factors backing up recent price gains.
The next two weeks are expected to result in freezing conditions across nearly all of the lower 48 states, resulting in heightened demand and diminished supply. Already supply is experiencing faster than anticipated drawdowns, with the latest figures from the EIA showing that gas in underground storage fell by 237 BCF compared to analyst expectations of a 222 BCF draw.
Nevertheless gas prices fell after the announcement, pulling back from recent multi-year highs before rebounding modestly during the Asian overnight session. Oil prices are trending slightly higher after comparable inventory figures showed another surprising inventory build and production which fell modestly.