Energy
Natural Gas at 12-Month High on Cold Forecast, Short Covering
Published:
Last Updated:
The latest weather forecast for the latter part of this week has pushed natural gas for December delivery up about 8% to a new 52-week high for the contract. Rain and snow are expected across the northern part of the Lower 48, with temperatures falling in the Rockies and the Northern Plains and the cold moving eastward later in the week.
With natural gas stockpiles remain below the five-year average, and a forecast increase in the number of heating degree days is expected to last through the middle of November with the peak occurring in the middle of next week, according to a report from Bespoke Weather Services cited by Natural Gas Intelligence.
According to Bespoke:
On net we do eventually see the pattern trending warmer through the second half of November, which does likely help prices set a high this week, and balances are much looser with power burns off significantly (though production is not yet back to highs).
While the U.S. Energy Information Administration report due on Thursday could move prices lower on the longer-range warming trend, the cold weather expected this week is “so impressive” that it supports higher bids for the fuel but is also causing a major short covering rally.
The short covering also may be responsible for a boost in the share prices of some natural gas producers. Chesapeake Energy Corp. (NYSE: CHK), the nation’s second-largest producer of natural gas, traded up more than 9% just before noon Monday, at around $3.83 in a 52-week range of $2.53 to $5.60.
EOG Resources Inc. (NYSE: EOG) trade up about 3.7%, at $106.10 in a 52-week range of $ 96.54 to $133.53.
Natural gas for December delivery traded up 7.9% at $3.54, after reaching a peak of $3.57. Gas for January delivery traded at a new high of $3.58 before slipping a bit to $3.55, up 7.3%.
24/7 Wall St.Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
