Worsening weather forecasts and heavy snowstorms currently sweeping across Nebraska, Wisconsin and Iowa are driving up natural gas prices.
After the MDA Weather Service issued a report warning that temperatures will fall below seasonal averages across Midwestern states between Dec. 25 and Dec. 29, natural gas futures rose 2.6%, Bloomberg noted. This week, the region is experiencing blizzard conditions that have closed roads and caused power outages.
On Thursday, natural gas futures for January delivery climbed more than 2% to $3.40 per million British thermal units. Natural gas futures have risen 14% so far this year, their first yearly gain in five years. Colder weather will likely cause a spike in home and commercial heating fuel consumption.
The new forecast contradicted earlier predictions of a seasonally normal range of temperatures in the region. If the new reports are correct, Chicago could see the mercury plunge six degrees below normal to just 14 degrees on Dec. 27.
One market analyst said additional reports of colder-than-normal weather could send natural gas prices even higher as the country gets deeper into winter.