Natural Gas Futures Top US$7.00 Per MMBtu

Natural gas futures this afternoon topped a new high in North America as much of the continent is hit with colder than normal temperatures for this time of year, while gas continues to be exported to Europe to ease the reliance on Russian gas amid ongoing conflict in Ukraine.

Prices at Henry Hub hit a high of $7.02 per MMBtu today as the gas continued its march higher off of lows experienced in early February. The latest run got underway in mid-March, when prices took off from $4.57 per MMBtu to arrive at the current $6.99 per MMBtu being experienced right now.

One analyst pointed to several factors for the rising price in a note published on Monday, including near-record demand for natural gas domestically, slow production growth, and growing exports for European markets. “Producers remain wary of a regulatory and investment push to transition away from fossil fuels, though the Ukraine war and the related geopolitical pressures have softened that to some extent. Beyond that, producers are also contending with the results of pandemic-era supply chain issues,” said Sheetal Nasta in a piece for RBN Energy.

“Total demand, including exports, averaged 115.8 Bcf/d, up 5.4 Bcf/d year-on-year, and while incremental LNG exports were a chunk of those gains, the bulk came from domestic demand, particularly the power sector. With demand up more than supply, the balance averaged negative 15.34 Bcf/d.”

Natural Gas Intelligence meanwhile on Monday pointed to colder than normal weather being experienced in many parts of the US this month as being the reason behind the bump in pricing in recent days. This comes off the back of storage level concerns, which were present even before the latest weather trends. Current estimates place the storage deficit at 300 Bcf, which is now expected to last through the month.

Information for this briefing was found via, Bloomberg, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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