Natural gas rises 20% on expectations of a colder-than-normal January on the East Coast
A chimney from the Linden Cogeneration Plant is seen in Linden, New Jersey.
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Natural gas futures rose on Monday, hitting a new 52-week high after reports of a below-normal temperature outlook for January.
Natural gas futures in February rose nearly 19% during the session after updated outlooks from The Weather Company and Atmospheric G2 released on Sunday showed that the temperature forecast for next month it is expected to be colder than average in the eastespecially from Florida to Maine as well as certain parts of the Great Lakes.
In the West, however, temperatures are expected to be below average, the report said. Namely, the “Four Corners” region – the area of the United States consisting of the southwest corner of Colorado, the southeast corner of Utah, the northeast corner of Arizona and the northwest corner of New Mexico – is expected to be the most above average.
The report also said cooler temperatures in the east could peak by mid-month, possibly “well below average” compared to the full-month forecast for the eastern US. However, it is still not clear how the temperatures will hold in the second half of January.
For that matter, AccuWeather meteorologists said the cooler air could set a “storm pattern,” with areas of “significant snow and ice” for much of the first half of the month. They added that the decline will begin in the middle and end of next week.
John Kilduff of Again Capital told CNBC “Squawk on the Street” On Monday, we could see natural gas “freezes,” meaning disruptions in natural gas production flows.
“We are talking [about] terrible weather with the polar vortex, which caused natural gas to rise this morning,” the company’s founder said.
The move in February futures comes as natural gas – which is used to heat homes – has risen significantly recently. Commodity prices have jumped nearly 9% in the past week and about 58% this year.
Meanwhile, Brent crude oil futures rose 33 cents to $74.50 per barrel, while US West Texas Intermediate oil rose by 92 cents to $71.52 per barrel.
