(Bloomberg) -- Hot weather has arrived early in the U.S., and natural gas bulls are loving it.
Halfway into May, temperatures across the U.S. are well above normal, thanks in part to high pressure over the Atlantic Ocean and fewer storms in the Pacific. That pushed gas prices on Tuesday to their highest intraday point since Feb. 5.
“A hot May is very important,” said Stephen Schork, president of the Schork Group, an energy consulting company in Villanova, Pennsylvania. “It bodes well if you are bullish for gas.”
May is an important month for gas, a time when stockpiles grow after the winter heating season. This year is a little different. The hot weather is prompting people to fire up air conditioners early, driving demand for electricity and, in turn, gas. That could eventually cut into stockpiles as the market gears up for peak air conditioning season in July and August, Schork said.
Blame the oceans. To the east, a weather pattern known as the North Atlantic Oscillation has shifted into its positive phase, allowing high pressure -- and heat -- to build over the U.S., said Bradley Harvey, meteorologist with Radiant Solutions. On the West Coast, there is less moisture and fewer storms coming off the Pacific. That, combined with warm water, is allowing more tropical air to filter north, said Shunondo Basu, a meteorologist and gas analyst for Bloomberg New Energy Finance.
For now, gas inventories are within the normal range. But the heat that’s forecast to build through the month could change that. Gas deliveries to power plants rose Monday to the highest point for this time of year going back to 2007, according to PointLogic Energy.
So how hot has May been? Through Monday, New York was 5.9 degrees Fahrenheit (3.3 Celsius) above normal for the month, and Chicago was 6.6 degrees higher, the National Weather Service said. Houston, Boston, St. Louis, Minneapolis and Atlanta have all been warmer than normal.
Meteorologists predict the heat is here to stay. Arctic sea ice is forecast to be at a record low, which means fewer opportunities to get a break from hot and humid weather. Plus, about 44 percent of the contiguous U.S. was abnormally dry or in drought through May 8, according to the U.S. Drought Monitor in Lincoln, Nebraska. “Less soil moisture leads to generally hotter temperatures,” Basu said.
Those air conditioners could be whirring for months to come.
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