Natural gas prices have hit a one month high because of lower than expected reserves along with a strong hurricane season. Yesterday the fuel closed at $4.80 per BTU for July delivery. Earlier in the day, it actually hit $4.859, which was the high for the month.
The coming summer heat is what has caused natural gas prices to rise. As people in the U.S. begin using the precious commodity to cool their homes in June, July and August. Why are the reserves lower than expected?
There is no good word on why the reserves only got a 83 bcf injection when they normally get 350 bcf each week. These numbers leave the total reserves 2% less than the five-year average. Does this mean people will be sweating this summer when it's time to keep the ac on full blast?
It probably doesn't. Part of the rise in natural gas prices is due to the hurricane forecast. It seems likely that this small injection could just be an anomaly. It'll take a few weeks for the verdict to be completely read on this situation.
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