3) Why have the natural gas prices risen to the highest levels since 2022?
Natural gas _____________, so these ______________.
Wrong! - Households cannot store natural gas, and a future surplus contradicts the higher expected future price. If producers were storing gas, storage levels would not be decreasing. Firms have storage facilities, and higher prices cannot be explained by an increase in supply.
Well Done! - For a storable good, expected future shortages and the resulting rise in the expected future price increase current demand and raise the current price. Firms with storage capacity buy natural gas today to avoid future shortages.
Meteorologists are warning of an extreme winter storm. As temperatures are expected to fall, U.S. residents will need more natural gas to heat their homes. Very low temperatures can also disrupt gas pipelines. A huge decrease in storage is expected. Natural gas prices are at their highest since 2022.—cnn.com