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Finishes January Up 31% As Sub-Freezing Temperatures Loom

  • Natural gas finishes the session 5.1% higher at $4.874/mmBtu, completing a 31% monthly increase amid renewed optimism, due largely to an uptick in snowstorms in the Northeastern US where much of the gas consumption for heating comes from.
  • Below average temperatures in January and high LNG exports reduced U.S. working natural gas storage levels to below the five-year average again, after one of the warmest Decembers on record had boosted inventories to above the five-year average last month, the Energy Information Administration said on Monday.
  • Market participants may also be turning bullish on natgas due to sub-freezing temperatures that are expected to arrive this week in Texas, which could reduce production from some gas fields, keeping inventories in a deficit compared to the average.
  • Furthermore, ongoing uncertainty related to whether Russia may reduce gas supplies to Europe, forcing US producers to step up and fill the void, are adding even more price support.

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