Forecasts on cold weather have driven Natural Gas prices up by 10% on the US market.
Image: BRENDAN SMIALOWSKI / GETTY
Investors are looking to short term cold snaps in the lower 48 states of America to bring Natural Gas consumption and prices up. According to the US government weather service national temperature report (for the contiguous United States) issued 1 am EST Thursday, January 15, 2015, give the lowest temperature for Wednesday, January 14, 2015 at -34 degrees Fahrenheit at Van Buren, ME, with the forecast for cold weather reported as, “Conditions will become increasingly wet towards the latter half of the week as a strong cold front steadily approaches the West Coast. Moisture streaming inland ahead of this system will fuel widespread rain along the Washington and Oregon coasts by Thursday night, with heavy snow expected for the higher elevations of the Washington Cascades.”
The US Energy Information Administration is due to release new forecasts of Natural Gas Consumption this afternoon [GMT] possibly revising the previous prediction of increases in total consumption from an average of 73.8 Bcf/d in 2015 and 74.8 Bcf/d in 2016, compared with an estimated 73.6 Bcf/d in 2014.
Thomson Reuters Analytics report on predictions on heating degree days (HDD) recorded 462 HDDs earlier Tuesday, well over the 458-HDD norm for this time of year. However after the latest weather models were released 490-HDD are now expected.
The demand due to the cold weather will impact on the natural gas inventories; it is these predictions that caused the prices to rise 5.3% on Tuesday and near 10% on Wednesday closing at 3.297. Today’s opening price was 3.296 and the commodity is still rising, currently at 3.228.
MT4 chart: Natural Gas
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