Frigid winter weather driving natural gas consumption to record levels

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    Investing.com - Blasts of arctic winter winds during early December, and continuing throughout the month in the U.S., have quickly driven the price of natural gas up to record levels.

    Natural gas prices surged to more than $3.70 per million Btu (MMBtu) in recent weeks, and also increased the share price of leading drillers, companies which had lost the confidence of investors.

    Chesapeake Energy Corporation (NYSE:CHK), one of the nation's largest natural gas producers, has seen its per share price climb by more than 300% this year, and up by more than a third in just the past few months.

    As gas prices continue to rise, analysts say, so will the company's share price.

    Natural gas drillers are adding new rigs to their gas fields, analysts said.

    These drilling companies are expanding at a number of gas formations, including the Marcellus and Utica Shales sites in Pennsylvania and Ohio, as well as the Haynesville Shale site in Louisiana. The gas rig count is now up to 129, up more than 30% in recent weeks.

    Most interestingly, analysts said, coal production may also increase in the short-term, in early 2017, if natural gas suppliers are not able to meet market demand.

    The market developments mirror the industrial policy prescriptions of President-elect Donald J. Trump, who has called for increased natural gas production as a way to reduce overall energy costs for U.S. consumers and reduce harmful emissions.

    Cheap natural gas is the primary reason for the decline of the U.S. coal industry, but Trump wants to bolster the industry's prospects by promoting "clean coal" technology, as he said on the campaign trail this past year.

    Clean coal is a broad term that includes processes or techniques that mitigate emissions of carbon dioxide (CO2) and other greenhouse gases that arise from the use of coal, mainly for electrical power generation. This includes carbon capture technology which isolates emissions, and stores them underground.

    Credit Suisse (SIX:CSGN), the investment bank, has reported that an investment in clean coal technology of $15 billion, globally, would be transformative for the industry and the environment.

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    This article appears in: Investing , Forex

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