U.S. natural gas prices rose sharply to start the week, recovering from recent declines as updated weather models pointed to colder-than-expected conditions across key regions of the country in late January.
Front-month Henry Hub futures climbed by as much as 7% early Monday, building on a modest recovery from last week’s low near $3.10 per million British thermal units. Traders had largely priced in mild temperatures earlier in the month, but revised projections now show a significant drop in temperatures across the Midwest and East Coast toward the end of January.
The natural gas market has been under pressure for much of the winter due to record-high production and relatively stable inventory levels. While supply remains strong, consumption had until recently been subdued due to unseasonably warm conditions. The updated weather outlook has prompted a reassessment of that trajectory, with market participants factoring in the potential for a spike in residential and commercial heating demand.
Diversified Energy Company plc (LON:DEC) is an independent energy company engaged in the production, marketing, transportation and retirement of primarily natural gas and natural gas liquids related to its U.S. onshore upstream and midstream assets.
