U.S. Natural Gas Prices Just Hit A 13-Year High. Blame Coal, Say Analysts

U.S. Natural Gas Prices Just Hit A 13-Year High. Blame Coal, Say Analysts

Natural-gas futures settled Thursday at their highest price since December 2008, with a rise in coal prices, tight supplies and global worries about energy supplies contributing to a price gain of more than 70% for the fuel so far this year. U.S. natural gas prices are “sensitive to any near-term supply concerns created by events like a ban on Russia coal exports, abnormally cold weather,” or Russian natural-gas export issues, given tight global supplies, said Rob Thummel, portfolio manager at Tortoise.

Natural-gas inventories stand at around 17% below their five-year average in the U.S., with the Energy Information Administration pegging stocks at 1.382 trillion cubic feet for the week ended April 1. In Europe, stocks are around 20% below their five-year average, said Thummel.

On Thursday, the May natural-gas futures contract NGK22, +4.63% NG00, +4.63% settled at $6.359 per million British thermal units, the highest front-month finish since Dec. 2, 2008, according to Dow Jones Market Data.

The rally in the fuel’s price has also come as average weekly Central Appalachia coal prices, the U.S. benchmark for eastern coal, stood at $106.15 per short ton on April 1, up $8.85 from a week ago and at the highest since 2008, according to data from the Energy Information Administration. The run up in coal prices has led to higher demand for natural gas.

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Source: MarketWatch

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