I can think of a few reasons. For a start, it has been very cold in parts of the US recently. I was over in Minnesota for Thanksgiving and it was -10 deg celcius or colder on many days. We also got a ton of snow, which isn’t that common for that time of year. That kind of weather is going to increase demand for natural gas significantly due to the fact that it is used for heating. Note that gas storage drawdowns around then were larger than expected. For example, a report from the Energy Information Administration (EIA) on 20 November showed a drawdown of -14 billion cubic feet, surpassing the expected reduction of -12 billion cubic feet.
Another factor at play is US exports. Recently, the US has been shipping record amounts of natural gas overseas. Europe has been a dominant buyer of US liquified natural gas (LNG) due to the fact that it is moving away from Russian pipeline gas. Here, countries like the Netherlands, France, Spain, and the UK have all been buying. Countries in Asia and Latin America have also been buyers of the commodity. This has left less of a cushion for US domestic needs. As a result, supply and demand dynamics have pushed prices up.
It’s worth noting that natural prices have come down a little bit recently. Milder US weather forecasts for the Christmas period and less storage drawdown than expected in the week to 28th November have been two drivers of the weakness.
