Polar vortex drives up demand for natural gas, but not the price

Associated Press

LOS ANGELES

While the polar vortex is driving up demand for natural gas, it isn’t doing the same for the price.

The massive weather system is blanketing much of the Midwest and Northeast in a deep freeze, and demand for natural gas is spiking as homeowners crank up the heat to stay warm.

Yet natural-gas prices have fallen this week and are in the throes of a two-month skid. The bone-chilling cold stretches from Bismarck, N.D., to Portland, Maine, but will be relatively short-lived. Forecasters say warmer than normal weather is coming to replace it.

An early blast of winter weather coupled with U.S. natural-gas stockpiles hovering at a 13-year low drove natural-gas prices to $4.84 per 1,000 cubic feet in mid-November, the highest closing price in more than four years.

Prices began to drop around mid-December when temperatures rose to above normal. The warming spell continued into January, sending prices to below $3 and allowing supplies of natural gas to be replenished, another factor for helping keep prices subdued.

Prices rose to $3.59 in mid-January amid a brief cold spell, but by Thursday had dropped to $2.81 per 1,000 cubic feet. That’s down 42 percent from its peak in 2018 and 6 percent lower than a year ago.