Natural gas prices rise as summer cools off

Natural gas has been a major driver of inflation, and prices are rising. In addition to heating and cooling, gas prices factor into the cost of producing electricity, fertilizers, plastics, cement, steel and glass. Since profits are being pinched on businesses beer-box maker and wallboard manufacturers bitcoin minersAnd higher costs are slashing prices for consumers and putting pressure on the Federal Reserve to raise interest rates.

dollar Tree Inc.

Executives told investors Thursday that although higher energy prices and inflation could send customers to its more than 16,000 discount stores, the company itself faces higher costs. The firm has already raised highest price Its namesake stores from $1 to $1.25, and cautioned investors that it expects its expenses to increase during the rest of the year.

“The rise in natural gas prices is impacting utility costs across the business,” finance chief Kevin Wampler said during a call to discuss first-quarter earnings.

Fuel traders and analysts say prices could rise even more if warmer weather arrives and air conditioners are cranked before winter puts enough gas into storage facilities, when fuel is burned for summer.

The Energy Information Administration said Thursday that US gas inventories ended last week 15% below the five-year average. Stored gas shortages increased during the week due to the build-up of smaller than normal reserves.

Inventory has been weighed down by strong demand for liquefied natural gas, or LNG, among European buyers Russian gas replace and domestic drillers who have been slow pace of production Despite the highest prices in years. US gas production has returned from low levels of lockdown but has not kept up with demand due to roughnecks and rig shortages, limited pipeline capacity in some areas and executive compensation plans that encourage these days Profitability on production growth,

Meanwhile, the highest ever Appalachian coal prices and a reduction in hydroelectric power due to drought in the US West have fueled demand for electricity generated by burning gas. Forecasters expect La Nia weather patterns to give another result terrible heatExcept possibly in the south, where abnormal humidity can drive demand for air-conditioning, even when temperatures may not.

“There are almost no limits for natural gas,” said analyst Kent Byzitoglu of energy advisory Baker & O’Brien Inc. You can make your driving a lot easier than you think by reducing your natural gas consumption.

Investors have turned to producers’ stocks as other stocks declined. shares of

EQT Corporation

The largest US gas producer, has more than doubled in the past three months while the S&P 500 stock index has fallen more than 7%.

Comstock Resources Inc.,

which drills north of LNG export terminals along the Gulf Coast of Texas and Louisiana and is majority owned by Dallas Cowboys boss Jerry Jones, has more than doubled since Russia invaded Ukraine in late February .

Futures climbed from around $7 in late April, data from the Commodity Futures Trading Commission showed hedge funds and other speculators reduced their bets on rising prices this month. Bullish bets that remain are approximately equal to outstanding short positions, or bets that the price will drop.

Trading firm Ritterbush & Associates told clients that it had raised its forecast for July futures from $9 to $10 due to the high number of bets on low inventory and falling prices. The idea is that if prices continue to rise, traders with short positions will have to buy futures to close their bets, raising prices further,

Futures for June delivery, which ended Thursday, ended at $8.908, down from a high of $9.401. July futures closed at $8.895 in more active trading.

Higher oil and gasoline prices could help keep a lid on natural gas prices by encouraging drilling in places like West Texas, where crude is the target and a lot of gas is a byproduct, Mr. Byzitoglu said. He expects natural gas prices to ease once the first major heat wave passes.

“It’s like a roller coaster,” he said. “You are not afraid of going down, but of going up.”

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