U.S. natgas futures hit 13-year high on cold forecast

U.S. natural gas futures jumped as much as 6.8% on Monday, hitting a more than 13-year peak, on expectations of colder weather that could boost heating demand.

Front-month gas futures were up 5.9% at $7.733 per million British thermal units at 10:15 a.m. EDT (1415 GMT), having earlier hit their highest since September 2008.

“A larger expansion (in deficit) appears on tap… given this week’s unusually cold patterns across the mid-continent region,” advisory firm Ritterbusch and Associates said in a note.

“This dynamic of deficit expansion driven by an unusually cold April is combining with continued strong export demand toward Europe in increasing the market’s upside possibilities.”

Data provider Refinitiv estimated 156 heating degree days (HDDs) over the next two weeks in the Lower 48 U.S. states, higher than the 30-year norm of 129 HDDs for this time of year.

HDDs, used to estimate demand to heat homes and businesses, measure the number of degrees a day’s average temperature is below 65 Fahrenheit (18 Celsius).