U.S. natural gas prices surged to the highest level since September 2008 after jumping 16% last week alone. Now the accumulated gains leave a staggering 113% price increase since the end of last year.
Natural gas futures soared 9% to $7.96 per million British thermal unit (BTU) in the most recent trading. This was the fifth straight positive week of gains.
Despite the ongoing geopolitical unrest, some analysts believe this natural gas spike will be relatively short. “This market could come undone really fast. It is way overbought. You’ve got to wonder who is left to buy it,” said to CNN Robert Yawger, vice president of energy futures at Mizuho Securities.
Yawger and others in the industry say that high prices will incentivize a greater U.S. supply, while consumers overseas, mostly in Europe, are paying far higher prices.
Earlier this week, the Joe Biden administration said it will resume selling leases to drill for oil and gas on federal lands, aiming to increase production and control inflation.
Prices for utility gas service in the U.S. soared by 21.6% in March from the year before, according to the Bureau of Labor Statistics.
This latest surge will only add to inflationary pressures in the U.S., which is already grappling with a 40-year high in home prices.