A fresh burst of arctic air around the Midwestern United States helped U.S. natural gas futures surge more than 11% on Wednesday.
With the forecast of snow showers continuing over the next several weeks, coupled with an indication that stockpiles may simultaneously plunge, Nymex natural gas prices increased by 11.2% to stand at $4.74/MMBtu.
Although production has increased in this year, further increased demand since the beginning of November has kept inventories well below normal. With an unusually cold start to the winter season, analysts expect supply to be constrained for the entire peak heating season considering the low levels of inventory, which in turn can make prices go up further.
With the potential for natural gas shortages at the end of the season, several gas-focused companies like Antero Resources (AR, +2.91%), Gulfport Energy Corporation (GPOR, +3.40%), EQT Corporation (EQT, +2.14%) and Cabot Oil & Gas (COG, +2.64%) were some of the top gainers in Wednesday’s trading session, with gains ranging between 2% to 3%.