On Tuesday, U.S. natural gas futures fell after hitting a 52-week high on Monday. Trade remains volatile, with a surge of arctic air forecast for January.
The details: On Sunday, AccuWeather meteorologists released a long-range forecast predicting the descent of cold arctic air over much of the United States and the potential for snow and ice storms through the first part of January.
The forecast even hinted at the possibility of “the coldest January for the entire United States since 2011,” according to Paul PastelokAccuWeather's long-term expert.
Read next: Bill Ackman sends Fannie Mae and Freddie Mac stocks to the top: 'Trump likes big deals'
John Kildufffounding partner of Again Capital, told CNBC on “Squawk on the Street” that disruptions in natural gas production, called “freeze offs,” are a possibility.
“We're talking about frigid polar vortex-type weather conditions, which caused this spike in natural gas prices this morning,” Kilduff said Monday.
Traders reacted to the announcement, sending February natural gas futures up about 15% during Monday's session. Prices fell on Tuesday, but remain 10% higher over the last five days.
On Tuesday, natural gas futures lost about 6%, to $3.70/MBtu.
The ongoing war in Ukraine and the possibility of reduced Russian gas flows to Europe are also driving growing demand for U.S. liquid natural gas exports and putting upward pressure on domestic prices.
The FNB United States Natural Gas 12 Month (NYSE:UNL), which tracks the 12-month average of natural gas futures, rose 6.6% in December and the FNB United States Natural Gas (NYSE:UNG), which trails natural gas futures by nearly 18% over the same period.
Read more:
Image: Shutterstock
