Natural Gas Skyrockets Above $6
After a big gain on Tuesday, February 18, the March futures natural gas contract quickly exploded in price on Wednesday, jumping up over 9 percent past $6 per million British thermal units. At the time of this writing, it had surged $0.51 – a 9.15 percent increase – to $6.06/MMBtu. As evidenced in the one-week historical natural gas chart below, courtesy of barchart, prices have risen at a staggering rate in the last week alone – over 20 percent. Additionally, natural gas storage is very low; the level as of February 7 was 1,686 Bcf, a number 33.9 percent below where it was a year ago and 27.2 percent below the five-year average. Analysts believe storage may drop below 1 trillion cubic feet by the end of the winter. They also think that the dramatic increase in price is largely due to what has been an extremely cold winter. While the weather has certainly affected prices to a certain degree, the influence of the weather may be slightly overstated, as the futures contract is for March, and winter may be nearing its end.
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