(September 2020)

Natural gas is red hot and rising (no pun intended ha), and just completed its largest ever monthly gain. August saw natural gas prices rise an eye-opening 51%. Despite inventories being 81% higher than last year, natural gas has been gaining because of increased demand. California, which is facing wildfires and blackouts, has had very high natural gas needs, driving up prices. The Energy Information Administration says that natural gas demand for power generation has been surging, with July seeing is largest ever single month increase for that purpose. That said, overall national demand in July was down because of decreased economic activity. Total supply has been cut significantly since pre-COVID, but inventories remain high.


FINSUM + Magnifi:  Natural gas is facing a number of stimulus headwinds and tailwinds. The key factors that will drive pricing seem to be multi-faceted: will economic growth drive up demand faster than new supply will be added; and additionally, how will winter demand affect pricing?

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