Irina Slav
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
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By Irina Slav – Jan 03, 2025, 3:33 AM CST
Natural gas and heating oil prices in the United States started the year with a spike as temperatures dropped amid a polar vortex that, according to forecasts, could bring the coldest weather in a decade to northern states.
Natural gas prices have gone up by 4% since the start of the week, the Financial Times reported today, adding that heating oil prices have added 5%. At the start of the week, natural gas futures briefly topped $4 per million British thermal units.
“The market has been rather complacent as US production was surging and inventories were above normal,” Price Futures Group analyst Phil Flynn told the publication. “But at the same time, the market may have to face a winter challenge that it has not seen in a while.”
Separately, Flynn told Fox News that the frigid weather could exert additional upward pressure on prices by curbing supply. “When you get a cold event like this, not only do you see record demand, but then you have the possibility of infrastructure freezing up,” Flynn told the network in an interview. “They have to shut the wells down because it’s too dangerous to produce.”
Gas prices may yet go higher before the week is over after the Energy Information Administration publishes its weekly inventory report. Analysts surveyed by the Wall Street Journal expect inventories to have shed 131 billion cu ft in the last week of December.
“We are not anticipating a significant market response to the data with the market primarily focused on some unusually strong supply draws beginning next week and possibly extending through the rest of this month if below normal temperature trends continue,” Ritterbusch analysts said in a note.
Meteorologists have
https://oilprice.com/Latest-Energy-News/World-News/US-Natural-Gas-and-Heating-Oil-Prices-Jump-on-Cold-Snap-Forecast.html
