Natural gas for delivery in August surged to the highest level in 31 months, driven by supply concerns that could come in the remaining months of 2021. UNG is down 0.22%, while KOLD is up 0.28% premarket.
- Natural gas futures for delivery in August climbed to $4 per million British thermal units. This is the highest in 31 months since December 2018.
- Global prices have continued to climb as weather conditions drive demand, especially for air conditioners.
- US prices have rallied due to concerns of a possible supply deficit in the winter as households will need more for heating.
- Analysts believe the rally is justified by the heat situation, which has not been recorded in a significant period of time.
- The market will likely enter winter with historic lows in terms of supply. Buffers are currently below average, with production down as producers comply with investor calls for prudent spending.
- Exports are also weighing on supplies as shipments exceeded Australia’s for the first time in history. Gas deliveries to Mexico also reached an all-time high.
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