By Avi Salzman
Natural gas prices have been on a wild ride lately, rising and falling based largely on weather forecasts. Last week they hit their highest level since 2022. Since then, they've done a U-turn.
On Tuesday, they were down 7% to $4.57 per million British Thermal Units, after falling 7% on Monday. Prices are still up 26% since the start of the year.
The fallout from all this volatility could hit stocks and consumer bills in the weeks ahead.
Natural gas prices rose to $5.29 on Friday, the highest level since late 2022. Natural gas is used for both heating and electricity-generation. When the weather gets cold, people use more of it, and prices tend to rise.
The other factor lifting prices this year is rising demand. The U.S. is exporting a record amount of liquefied natural gas to Europe and Asia. Countries overseas will pay more than U.S. consumers.
Forecasts in several parts of the world had been calling for particularly chilly weather this month. But those forecasts can change fast. More recently, some forecasters have been projecting that temperatures will rise toward the end of the month. "Warming weather has opened the door to chances for far more bearish weather patterns," wrote analysts at EBW Analytics Group, a research firm, on Tuesday.
While most consumers keep their eyes on the price of gasoline to check up on inflation, natural gas is becoming just as important of a commodity. Not only is it used heavily for home-heating, it's the number one source of U.S. electricity generation. Rising prices can cause a backlash.
While natural gas producers such as EQT and Expand Energy benefit from high prices, they face risks, too, when prices spike. Some power plants have been switching to coal for generation this year as natural gas prices have risen, according to Bank of America strategist Francisco Blanch. And consumers tired of paying high prices for natural gas heat may consider other options, like electricity-powered heat pumps.
Write to Avi Salzman at avi.salzman@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 09, 2025 15:50 ET (20:50 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments