The spike in natural gas prices in November may prove to be short-lived. Natural gas spot prices jumped as high as $4.70/MMBtu in November, the highest price since the Polar Vortex of 2014. The run up in prices caught the market off guard, and even pushed an options trading firm to suddenly shutter its doors virtually overnight. The price increase was the result of a several factors that conspired to dramatically tighten the supply/demand balance. The U.S. has seen structural increases in gas demand over the last few years, with coal-fired power plants shutting down in favor of gas generation. The U.S. has also inaugurated a handful of LNG export terminals, diverting a growing portion of gas production overseas. There are also a series of seasonal factors at play. Last spring was unusually cold, then the summer was unusually hot, magnifying demand on both counts. This winter got off […]