NYMEX natural gas rallied 15.9% on Monday, its biggest one day gain in percentage terms since November 2018. Building on the gains, natural gas has surged over 3% today and hit a high of $3.722/mmBtu, the highest level since Dec.24.
Natural gas witnessed a sharp rally this week as a winter storm in US led to severe cold weather in parts of US. Colder weather increases demand for heating fuels like natural gas.
As per reports, the US was smashed by severe winter storm last weekend and snow blanketed Washington D.C. and the mid-Atlantic. According to AccuWeather.com, more winter storms and Arctic air are in the offing for the eastern and central United States after a brief spell of calmer weather through the middle of this week.
US gas stocks are well below average levels and higher heating demand may result in big withdrawals from the storage. US working gas stocks stand at 2614 Bcf which is 15.1% less than 5-year average stocks for this time of the year.