Rollercoaster moves in the natural gas market over the past few weeks are underscoring traders’ uncertainty about whether a frigid winter, muted output, and rebounding demand will send prices rocketing higher in the coming months.

Gas futures settled more than 7 percent higher on Monday, mimicking gains in oil and equities. But just two weeks ago, prices posted their biggest one-day loss in almost two years. Historical volatility has surged to levels not seen since late 2018, and implied volatility, a measure of how dramatic price swings may be going forward, is the highest in data going back to 2010.

Bullish bets on US gas have soared as traders wager on lackluster production and surging demand heading into winter. Liquefied natural gas exports are rising as consumption recovers from pandemic-driven lockdowns, and as terminals restart after storm-related outages and maintenance. Meanwhile, shale output remains subdued as drillers heed investor calls for financial restraint after this year’s oil-price crash.

Outsize moves in risk assets amid geopolitical turmoil have magnified the volatility in gas, while a hyperactive hurricane season has disrupted offshore production and LNG exports and triggered blackouts that curtailed gas demand for power generation.

“You’ve had a volatile market, but this is the icing on the cake,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. “Guys were stepping in to pick at the bottom.”

But as is often the case with the gas market, it all hinges on the weather. Though a La Nina pattern has emerged, which could lead to a chilly winter in the northern United States, brutally cold conditions are far from certain. A mild December, January, and February would limit gas demand for heating and curb withdrawals from underground storage, leaving the market oversupplied heading into spring.

Almost half of respondents

By Ron Bousso

LONDON (Reuters) – Royal Dutch Shell <RDSa.L> and BP <BP.L> have lost over half of their market value so far this year, with both shares hitting 25-year lows this week, battered by weak oil prices and investor concerns over their plans to shift to low-carbon energy.

Exxon Mobil, the largest U.S. oil company, which is set to report its third straight quarterly loss at the end of this month, has seen its shares dive 52% since the start of the year.

Oil companies are squeezed by a steep drop in oil prices due to the COVID-19 pandemic combined with growing investor pressure to align their businesses with the 2015 Paris agreement to limit global warming.

Responding to the pressure, Europe’s top companies outlined strategies to curb greenhouse gas emissions in the coming decades, with BP and Italy’s Eni <ENI.MI> planning to rapidly cut oil output by 2030.

BP CEO Bernard Looney, reacting in a LinkedIn post to the drop in BP shares this week, said that there is “a very significant need to change bp.”

“I think – if anything – the share price performance of the sector is a robust case for change in itself,” Looney wrote.

(Graphic: Oil majors share performance – https://fingfx.thomsonreuters.com/gfx/ce/xegvbjwxkvq/Pasted%20image%201601637582541.png)

Yet investors remain sceptical.

“The majors are struggling to convince any investor at the moment,” said Jason Kenney, analyst at Santander, who has a “buy” rating on all European oil majors.

“There is a phenomenal give-up on the valuation of these companies… it is astonishing.”

Investors are fleeing the sector because of uncertainty over the global economic recovery in the near term and doubts about the profitability of companies’ transition plans in the longer term, Kenney said.

“With the COVID-19 backdrop and the uncertain economic outlook, it is challenging to be confident,”