By Ryan Dezember

Natural-gas futures ended Thursday at their most expensive point in nearly two years, driven up by traders who expect a frigid weekend in the East to cut into supplies of the heating and power-generation fuel.

Futures for January gained 6.2% to end at $3.584 per million British thermal units, up 39% from a year ago. For much of 2024, gas prices were depressed by a glut leftover from last winter, which was unusually warm.

Drillers have repeatedly had to curtail output and slow drilling to buoy prices. Now, however, traders are beginning to worry about near-term shortages.

The second consecutive big weekly drawdown of gas inventories left stockpiles about 3.8% greater than the five-year average, the Energy Information Administration said Thursday. That's down from a 7.8% surplus at the end of November.

Forecasts calling for furnaces to be blasting this weekend have traders bidding up January futures significantly higher than prices for gas to be delivered in February.

The roughly 20-cent price difference reflects market expectations for the weather to warm up next month, and for producers to have time by then to bring curtailed output back on line. The big price difference also suggests that traders are worried that it could get cold enough in the coming days for wells to freeze over and disrupt supply.

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(END) Dow Jones Newswires

December 19, 2024 15:45 ET (20:45 GMT)

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