Natural Gas futures are soaring this week as record-breaking cold engulfs the United States. Warnings are being issued as the US is “starting off the winter with a big hole in our supply.”
NG futures for November shot up by 2.6% in Monday trading to $3.242 per million British thermal units, as hundreds of cold-records fell across North America.
The amount of Natural Gas in storage is well-below the five-year historical range, with 2,956 billion cubic feet recorded as of Oct 5.
Jacob Meisel, Bespoke Weather Services chief weather analyst, warned: “With natural gas storage levels so low, prices are sensitive to cold this early in the season.
“You always expect to get several weeks of low energy demand, and that’s not happening.”
Meisel went on to suggest that prices for natural gas could jump above $4.
Gas-Weighted Heating Degree Days
Perhaps one temperature metric government organisations can’t ‘bend’ to fit their narrative is Natural Gas supplies.
Between April and September 2018, gas-weighted heating degree days were at a record high.
April 2018 came out as the coldest for 35 years, and the 5th coldest on record:
April 2018 verifies as 5th coolest on record- coolest in 35 years- based on gas-weighted heating degree days; the first of the 2000s to make the top ten list too. pic.twitter.com/JMNSUwG8kX
— Commodity Wx Group (@commoditywx) May 1, 2018
And as a result, John Kilduff of Again Capital said: “Natural gas supplies are 17% below last year and the five-year average levels. Put in real numbers, that’s 600 billion cubic feet below.
“It means we’re starting off the winter with a big hole in our supply.”
And the issue isn’t with NG production, as that’s at an all-time record high — the issue is the frigid temperatures and the American population’s power burns for electricity to heat their homes.
With one-third of the CONUS experiencing record cold this week, we can expect reserves to be reduced further still.
Welcome to the Grand Solar Minimum.
Stay tuned for updates.