U.S. natgas futures rise to 31-month high on hotter forecasts

U.S. natgas futures rise to 31-month high on hotter forecasts

U.S. natural gas futures turned positive and rose to a 31-month high on Tuesday on forecasts for hotter weather and higher air conditioning demand over the next two weeks than previously expected. Earlier in the session, gas futures were trading lower on expectations high prices would cause power generators to burn more coal and less gas to produce electricity. Front-month gas futures were up 5.2 cents, or 1.4%, to $3.831 per million British thermal units (mmBtu) at 8:45 a.m. EDT (1245 GMT), putting the contract on track for its highest price since December 2018 for a second day in a row. Rising gas prices in recent weeks and the sharp nearly 8% drop in U.S. crude futures on Monday helped push the premium of oil over gas to its lowest since December 2020. Over the past several years, that premium prompted U.S. energy firms to focus most of their drilling on finding more oil instead of gas because crude was the more valuable commodity. The oil-to-gas ratio, or the level at which oil trades compared with gas, fell to 18-to-1 on Monday, which is below the 22 times oil has traded over gas so far in 2021. That compares with