Pure fuel rises 20% on expectations that January will likely be colder than ordinary on the East Coast
A chimney from the Linden Cogeneration Plant is seen in Linden, New Jersey.
Kena Betancur | Show press | Corbis news | Getty Images
Natural gas futures prices rose sharply on Monday, hitting a new 52-week high following reports of a colder-than-usual temperature outlook for January.
February natural gas futures rose about 15% during the session after an updated forecast released Sunday by The Weather Co. and Atmospheric G2 showed the temperature forecast for next month is expected to be colder than average across the East, particularly from Florida to Maine as well as in certain parts of the Great Lakes.
However, the west is expected to experience milder than average temperatures, according to the report. In particular, 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 furthest above average .
The report also said colder temperatures in the East could peak by the middle of the month and are likely to be “much further below average” compared to the full month forecast for the eastern U.S. However, it is still unclear how temperatures will affect the second half of January.
In a separate report, AccuWeather meteorologists said the colder air could create a “stormy pattern,” with areas experiencing “significant snow and ice” for a significant portion of the first half of the month. They added that the decline will begin in the middle and end of next week.
Again Capital's John Kilduff said on CNBC's “Squawk on the Street” on Monday that there could be a natural gas “freeze,” which could lead to disruptions in natural gas production flows.
“We're talking [about] “Harrowing polar vortex weather that led to this natural gas surge this morning,” the company’s founding partner said.
Earlier in the session, February futures prices rose as much as 20%, reaching a high of $4.201 per thousand cubic feet. That's the highest level since January 4, 2023, when prices were as high as $4,219 per thousand cubic feet.
The move in February futures comes as natural gas – used to heat homes – has posted big gains recently. Commodity prices are up nearly 9% last week and about 58% this year.
In the meantime, Brent crude oil futures rose 30 cents to $74.39 a barrel US West Texas Intermediate Crude oil rose 79 cents to $71.16 a barrel.
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