After a sudden 63% surge in natural gas prices in the United States, they quickly fell, but there is still a chance that the weekly increase could hit a new high since 1990.

In the United States, traders have been closing out their short positions, and the natural gas futures market ended a record three-day rally after preparing for a historic winter storm. On Friday, the near-month contract price plummeted by 7.6% to $4.660 per million British thermal units, after a cumulative increase of 63% over the previous three trading days. Despite this, looking at the overall situation for the week, natural gas futures prices are still expected to achieve the largest weekly increase since 1990. This week, natural gas prices surged significantly due to the forecast of below-normal temperatures in most parts of the United States. This cold weather is likely to increase natural gas consumption and reduce inventory. Of particular concern is the significant impact of this cold weather on gas-producing states in the south, leading to worries about ice forming in pipelines. If the water inside the pipelines freezes, it could disrupt natural gas production starting this weekend. Under the dual pressures of tightening supply and surging demand, hedge funds with previously bearish positions were forced to cover their short positions on a large scale, driving up natural gas prices briefly on Thursday. Data shows that natural gas prices briefly rose above $5.50 per million British thermal units on Thursday, and an analysis by Citigroup on Thursday indicated that this price level was enough to severely damage all short positions and make it difficult to continue. As of writing, the February contract fell by 3.39% to $4.87 per million British thermal units. Despite a market pullback on Friday, the fundamental situation of natural gas remains tight, with the trading price of the February futures contract significantly higher than the March contract. Additionally, according to the latest inventory report from the U.S. Energy Information Administration (EIA), the decline in U.S. natural gas inventories has exceeded market expectations, reflecting the current strong consumption capacity. Analysts generally expect that the extremely cold weather coming over the weekend could trigger the second largest weekly withdrawal from inventories on record. Although traders are transitioning into a cautious observation period after three days of frenzy, the cumulative increase in natural gas prices this week still has the potential to set a weekly record high since 1990.