Natural gas futures are trading at their highest levels in more than 13 years, with the May contract flirting with $8 per million British thermal units (Btu).
The energy commodity has been rallying on market tightness, driven by lower-than-normal temperatures in the United States and Europe and strong export demand amid Russia’s invasion of Ukraine.
In an April 12 report, the Energy Information Administration (EIA) lifted its price outlook for natural gas, forecasting that it could surge 32 percent in 2022 to a spot price average of $5.23 per million Btu, according to its monthly Short-Term Energy Outlook (STEO). The spot price represents the immediate buying and selling cost, while the futures contract price postpones payment and delivery to predetermined future dates.
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