Investing.com — Natural gas futures rose on Wednesday due to strong weather-driven demand across the United States. This increased demand coincides with a limited supply caused by some production freeze-offs.
Despite a drop in prices in the prior session, colder forecasts for the third week of January are causing a revival of the upside, according to a note from Eli Rubin of EBW Analytics.
Rubin pointed out that the market might be underestimating the scale of a significant national January storage draw. He added that the duration of freeze-offs might extend longer than initially thought.
A below-average storage withdrawal for the prior week is expected to be reported by the Energy Information Administration (EIA) at 12 p.m. ET. This is anticipated to be followed by large inventory draws in the subsequent weeks.
The combination of high demand and limited supply is driving the rise in natural gas futures.
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This post is originally published on INVESTING.
