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Wild U.S. Gas Price Swings Reveal Doubts About Winter, Supplies

  • Traders are betting on rising LNG exports, frigid weather
  • Bullish bets could unravel if cold blast fails to materialize
Historical volatility in U.S. natural gas has surged
Updated on

Rollercoaster moves in the U.S. natural gas market over the past few weeks are underscoring traders’ uncertainty about whether a frigid winter, muted output and rebounding demand will send prices rocketing higher in the coming months.

Gas futures settled more than 7% higher on Monday, mimicking gains in oil and equities. But just two weeks ago, prices posted their biggest one-day loss in almost two years. Historical volatility has surged to levels not seen since late 2018, and implied volatility, a measure of how dramatic price swings may be going forward, is the highest in data going back to 2010.