U.S. Natural Gas Futures Rise on Speculator Positioning

1458 ET – U.S. natural gas futures rise in a volatile session as the market approaches the shoulder season with a substantial storage deficit. “There’s been a huge speculative buildup over the past couple of weeks,” said Eli Rubin of EBW Analytics. Slightly colder weather forecasts, the tariffs on Canadian gas imports, and OPEC+ planning to raise oil output which could lead to lower oil prices and therefore less drilling and associated gas output, “theoretically could be a bullish catalyst,” Rubin says. “But none of them explain the magnitude of the past two days.” The market appears to be looking ahead to prospects of demand growth outpacing supply growth heading into next winter, where futures prices are averaging around $5, Rubin adds. The Nymex front month settles up 5.5% at $4.350/mmBtu after reaching $4.551 intraday. (anthony.harrup@wsj.com)

Natural-Gas Prices Surge After Ontario Retaliates With Electricity Export Tax

1230 ET – Natural-gas futures surged to a fresh two-year high after Ontario Premier Doug Ford said the Canadian province would place a 25% retaliatory export tax on electricity it sends to homes in Minnesota, Michigan and New York. The power-generation and heating fuel traded as much as 10% higher Tuesday and has been rising at a time of when prices normally decline into spring. Analysts say that supply and demand fundamentals don’t justify the recent climb, which they attribute to speculators positioning for Trump’s trade war as well as a pledge by OPEC and its market allies to pump more crude, which could could reduce domestic oil drilling and thus the amount of gas that is unearthed as a byproduct. (ryan.dezember@wsj.com)