U.S. natural gas futuresAs temperatures dropped and winter forecasts predict more snow, Wednesday’s surge was more than 13%.

For February delivery, 13.3% of the contract was increased to $4.818 per Million British Thermal Units. It is now at its highest point since November.

“The Heating Demand Outlook for [the]The eastern-third U.S. has strengthened significantly for this weekend, and for the final week of January,” John Kilduff of Again Capital said. He noted that Saturday’s record natural gas demand could be due to Friday’s cold blast.

He said, “The weather is no longer a factor or bearish in any season, but it has become a meaningful driver for the prices and demand.”

Natural gas prices fell 36% in the fourth quarter after surging through much of 2021. This was due to warm temperatures, and the introduction of the omicron version which sent market jitters.

The contract saw a 47% increase in 2021. It is now up almost 30% for 2022.

Campbell Faulkner (senior vice president, chief data analyst, OTC Global Holdings) stated that prices have risen across North America because of the harsh winter and real worries about tighter supplies.

He said, “Overall there’s not the very slack supply natural gas market that was the dominant trend over the last 10 years.”

Jeff Kilburg (chief investment officer, Sanctuary Wealth) said some of the recent price rise can be attributed traders taking over positions.

He said, “The perfect storm has hit Nat gas futures, as freezing temperatures are hitting market as supply shortfalls still exist. This is all being amplified because many short speculator trader were caught offsides, and they are being forced to protect their positions, exaggerating today’s move higher.”