News / Business
Natural Gas Prices Rally on Colder Weather Forecasts
While natural gas supplies are sufficient, new weather forecasts calling for severe cold in February are still pushing natural gas prices higher.
There is growing consensus that below-normal temperatures are going to hit the Midwest and the Northeast by January 27, 2010. These forecasts pushed the February 2010 natural gas NYMEX contract to $5.869 per MMBtu on Friday, January 22, 2010.
“Upward price momentum is the product of the severity of some of these weather forecasts,” says Valerie Wood, President of Energy Solutions, Inc. “Phrases like ‘serious arctic air’ and ‘brutal cold’ are creating panic buying, and buying pushes prices higher. One meteorologist has even said that February 2010 could turn out to be one of the coldest Februarys in the last 115 years.”
A colder February could create some larger storage withdrawals during the month of February. Last year about 386 Bcf was withdrawn from storage during the month of February, but the five-year average reflects an average of 518 Bcf of withdrawals in the month of February. “In reality, there is no way to know at this time how accurate these forecasts will be, but that doesn’t really matter at this time.” says Wood. “Natural gas prices are taking these forecasts seriously and this could create some fireworks during the last three days of trading of the February 2010 natural gas NYMEX contract.”
Learn more about the 2010 natural gas price outlook in the February edition The Advisor, a newsletter specifically written for businesses as an educational tool and guide about the natural gas industry and price trends. Receive the February edition, as well as a full month of valuable natural gas pricing insight, by taking a free no-strings attached trial to The Advisor for 30 days. Or request a complimentary copy of the The Advisor by sending an e-mail to mailto:request-pr@energysolutionsinc.com?subject=Please%20send%20me%20a%20complimentary%20copy%20of%20The%20Advisor or call (608) 848-9589.
About Energy Solutions, Inc.
Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 25 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.
