A snowplow removes snow from Interstate 235 John McVicar Expressway on January 12, 2024 in Des Moines, Iowa.
Chip Somodevilla | Getty Images
Natural gas prices soared Tuesday as heating demand is expected to surge due to frigid temperatures across the United States.
Prices rose about 26%, or 80 cents, to $3.91 per million British thermal units. Natural gas is primarily used for heating and power generation.
EBW Analytics told clients in a note Tuesday that “the frigid weather will change the near-term natural gas outlook as an arctic air mass moves rapidly across the eastern United States and a significant increase in weather demand over the MLK weekend threatens severe market disruption.”
A major winter storm is expected to bring heavy snow, sleet and dangerous freezing rain to the southern Rockies, Plains and South by Friday, according to the National Weather Service. The storm is then expected to move toward the East Coast over the weekend.
Much of the United States was already experiencing frigid temperatures Tuesday morning. According to EBW Analytics, production may be halted due to the weather.
“Speculative short positions have reached a 14-month high as a result of the frigid weather, forcing short sellers to buy back gas, signaling further bullish risks,” the group told clients.
“However, volatility is likely to remain high, and near-term price increases could eventually slow if weather models warm through mid-February,” the group said.
