Natural gas prices jumped this week after weather models suggested January could be the coldest in at least a decade, triggering concerns about supply and infrastructure.
Key Facts:
– Natural gas futures surged over 20% on Monday, then slightly retreated on Tuesday.
– Phil Flynn, an energy market analyst and FOX Business contributor, warned that severe cold could stress U.S. storage and disrupt production.
– Europe faces a similar threat of higher prices, as its gas stockpiles may be depleted quickly.
– Russian gas giant Gazprom is set to halt piped gas deliveries through Ukraine, raising supply concerns overseas.
– President Biden’s pause on liquid natural gas (LNG) export permits sparked criticism that the U.S. could be missing an opportunity to support global supplies.
The Rest of The Story:
Forecasts indicate an incoming arctic air mass, which could make this January exceptionally cold.
On Monday, natural gas prices soared more than 20% before paring some gains the following day.
Phil Flynn explained that although America has abundant reserves, a series of especially cold weeks can deplete storage faster than usual.
A deep freeze also carries the risk of freezing pipelines and wells.
Flynn said, “They have to shut the wells down because it’s too dangerous to produce,” underscoring how extreme temperatures can choke off production.
Meanwhile, Europe could face its own crisis because Gazprom may no longer send gas through Ukrainian pipelines, threatening a significant supply route.
Critics point to U.S. export policy, suggesting that easing restrictions on shipping LNG might ease global market pressure.
For consumers, cold winters often mean heating systems work overtime.
In Flynn’s words, this is a “double whammy” because when temperatures fall, homeowners crank up the thermostat—at the same time natural gas prices are rising.
That combination could lead to noticeably higher bills, especially if the predicted bitter weather persists for an extended period.
Natural gas prices climb as weather forecasts show a coming cold wave turning into an exceptional arctic blast during the next two weeks. There are still questions about the cold wave's intensity and geographic scope. pic.twitter.com/z5PKFtbN4H
— Richard Meyer (@RichardMeyerDC) December 30, 2024
The Bottom Line:
A forecast of unrelenting cold is boosting natural gas prices in the U.S. and could strain supply lines.
Europe may feel the pinch as well, given existing supply uncertainties.
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Ultimately, how much consumers pay depends on just how long and how harsh the winter becomes.