Phil Flynn is senior energy analyst and a futures account executive at Chicago-based The Price Futures Group. He is one of the world’s leading energy market analysts and a daily contributor to Fox Business Network, where he provides market updates and analysis. HAI managing editor Sumit Roy recently caught up with Flynn to discuss the latest developments in the energy markets.
HardAssetsInvestor: Natural gas has been rallying recently, and now it’s at a seven-month high. Is it solely cold weather that’s driving up prices?
Phil Flynn: A lot of it obviously is the cold temperatures. It’s been cold, and based on the weather forecasts we’re seeing, it’s not going to get a heck of a lot warmer. In the next two weeks, we should see some substantial drawdowns in inventory. Having said that, yes, it is definitely the cold weather that’s given us this dynamic move, but you don’t want to underestimate the non-heat-related demand. There is demand growing everywhere.
While the cold weather seems to be overshadowing that right now, it’s definitely a story that’s going to continue. Manufacturing businesses are going to take advantage of these low natural gas prices and you’re going to see the non-heat-related demand continue to grow.
It’s going to continue to astound people. Our exports are a lot stronger; we’re going to be seeing a lot of natural gas going to Mexico, and they’re approving additional exports a lot more quickly than anybody thought possible.
Weather’s definitely your headline, and we probably wouldn’t be moving up like this if it weren’t cold, but there’s definitely more to it than just the weather.Read more HERE