Natgas trades higher as US cold snap bites back

Update: The weekly stock report from the US Energy Information Administration showed a smaller than expected drop in US natural gas inventories last week. The 166 bcf reduction initially triggered a small correction but prices quickly recovered, supported by the aforementioned cold front and the fact that the deficit relative to the five-year average rose to 424 bcf or 21.6%. 



While Europe has been basking in glorious sunshine and temperatures well above the seasonal average, the opposite can be said for the US. The short-term outlook from US NOAA shows a very high probability of colder than normal temperatures for the next 6 to 10 days across most of the US. So while gas prices in Europe has seen downward pressure this past month, US natural gas has continued to climb higher after once again finding support ahead of $2.50/therm.