Natural gas futures rise to 2008 levels, gasoline prices hit new high

Yahoo Finance’s Ines Ferré discusses stocks and commodities making significant moves in early trading.

Video transcript

JULIE HYMAN: Switching gears to another part of the market we're watching, you see there our Ines Ferre. She's watching natural gas prices, which are back at 2008 levels, excuse me, Ines. So talk us through what's going on there.

INES FERRE: Yeah, we're taking a look right now at natural gas futures, and look at our YFi Interactive Board. You can see that futures for June delivery is above $9 per million British thermal units. Those are the units by which it's measured. And as you were mentioning, Julie, these are 2008 levels. I'm going to pull up a max chart so you can see here. We haven't seen these levels since then. And a lot of the run-up has been over the last several months. I'm going to pull up a one-month chart. You can see natural gas is up 33%. Over a two-month chart, you can see the price action there.

And these prices are because of stockpiles which are lower for this time of year. You've also got exports that are booming to other parts of the world. Remember that Europe is even in a worse situation because natural gas is even more expensive there. And you also have demand from electricity providers, which is also driving up the prices.

Now, analysts are saying that they're expecting demand to continue throughout the summer. And this is important because when we watch these natural gas prices go higher, it's important because natural gas is a big driver of inflation because they are tied to the cost of producing electricity, fertilizer, cement, steel. And as one analyst had put it, it is difficult to curb demand for natural gas. It's easier to, for example, curb your driving habits than it is the consumption for natural gas.

JARED BLIKRE: And Ines, I know you're also watching RBOB gasoline futures. I think they're up slightly day today, hovering near their highs of the year. And this, in turn, is being translated into higher prices at the pump, unfortunately.

INES FERRE: Yeah, that's right, with gasoline at the pump now costing an average in the US of $4.60. That is a new high. And that is just the average. You have states like Oregon and Nevada, where you're seeing gasoline higher than $5 per gallon. You've got California, where it's higher than $6 per gallon. And we know some of the reasons why we are seeing these higher gas prices-- not enough refining that a lot of guests have talked about on our shows. And also, there's more exports.

And what's just been most interesting is a note I wrote earlier this week from JP Morgan analyst that are predicting that gasoline prices will go to an average of $6 per gallon. They could go to that average in the US, or even higher. And that's just an average, you guys, for regular gasoline. If you are using mid-grade or premium, it's even more.

JARED BLIKRE: I was in California two months ago, and it was already $8 in certain places. They're just incredible. Thank you for that, Yahoo Finance's Ines Ferre.