The biting cold is driving natural gas prices to near-record levels, sending forecasts for 2014 higher.
Already, natural gas prices have risen by about 20 percent since November, and December is on track to be the 16th coldest since 1950, Teri Viswanath, commodity strategist at BNP Paribas, told Big Data Download.
Analysts currently forecast record one-week gas withdrawals in December, Viswanath said.
What does this mean for prices in 2014? Viswanath points out that weather takes on a heightened role for natural gas balances by driving the call on marginal production and hence, price changes. She said prices should remain supported next year despite the possibility of robust summer restocking.
Based on supply and demand balances and the resulting path in inventories, prices should average $4.20 in 2014, according to Viswanath. This compares with $3.65 in 2013 and $2.80 in 2012.
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- Commodity Markets