The winter storm blanketing the Northeast and forecasts for a frigid February are boosting natural-gas prices. Natural-gas futures rose 11.1% to close at $2.85 per million British thermal units on Monday. That is 57% higher than a year ago, when the weather was uncommonly warm, yet still about 15% below the price to start this heating season.“An unusually strong response to weekend adjustments to the short-term temperature forecasts,” said Ritterbusch and Associates. The trading firm said prices could approach $3 this month if the weather outlook materializes.
The energy-focused investment bank estimates about 5 billion cubic feet more will be burned heating U.S. homes and businesses this week compared with last. An icy ending to winter could draw down stockpiles from around five-year highs to closer to where they normally end winter. Tudor Pickering expects natural gas to trade around $3.25 this summer.
Others aren’t so bullish. BofA Securities recently lowered its 2021 average-price forecast to $3.10, from $3.30. RBC Capital Markets last week revised its prediction to $2.79, from $2.86.