US gas futures broke the $5.00 USD/MMBtu barrier today for the first time since 2022. The NYMEX front month rose $0.16 USD/MMBtu or 3.2% to settle at $5.00 USD/MMBtu. The entire curve rose significantly with the calendar strip (Jan-26 to Dec-26) increasing by an average of 3.4%. The movement, unsurprisingly, was driven by forecasts revising colder once again. The cold is concentrated in the Midwest and Northeast, with the regions expected to experience well below normal temperatures mid next week.  

Looking at December as a whole, EBW analytics forecasts the highest December heating demand in the last 15 years. They project the current storage surplus of 160 bcf (against the 5-year average) will flip to an over 100 bcf deficit by the end of the month. Should this materialize, the upside risk on natural gas prices would be enormous, as utilities will begin to fear running out of gas. (PB)

Source: NOAA 6 to 10 Day Weather Outlook