Friday, May 9, 2025

Natural Gas Prices Sent Skyrocketing Amid Concerns Over Tight Supplies

The price of natural gas has soared to a 13-year high, as fears over scarcity ahead of the winter months intensifies.

October futures for natural gas jumped by more than 10% on Monday to close at US$5.86 per million Btu, marking the sharpest increase since February. November futures were also up on Monday, hitting a fresh high of nearly US$6 per million Btu— the highest since November 2008. Energy prices have been on a steep rise over the past several weeks, particularly as low reserves in Europe and China ignite fears over widespread shortages ahead of the cold season.

The steep rise in natural gas prices has been unprecedented across Europe, and is expected to be even worse than the US oil price shock of the 1970s, according to estimates from Rabobank. European natural gas prices have soared to above $25 per million Btu, which is a staggering 400% more than the average of the past decade, and significantly higher than the commodity’s price in the US.

To make matters worse, data from the Bureau of Safety and Environmental Enforcement showed that natural gas output has significantly declined in the US, as Hurricane Ida shuttered nearly 25% of gas production across the US Gulf of Mexico, with a full recovery not expected until well into 2022. This has caused US gas stockpiles to fall 6.9% below their historical average over the past five years, as the country prepares to send additional cargo supplies overseas amid renewed export capacities.

With strong demand from Europe and Asia, coupled with no upcoming boosts in output across the US Gulf of Mexico, a detrimental natural gas shortage could materialize in the event that North America succumbs to a cold December. However, if temperatures remain above seasonal during the winter, then the market could face a significant correction.


Information for this briefing was found via Bloomberg and the companies 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.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

European Governments Considering Billions in Aid as Energy Crisis Deepens

Out-of-control energy prices are forcing European governments to consider billions of euros in financial aid...

Thursday, September 23, 2021, 02:45:00 PM

Europe Faces Record Natural Gas Hyperinflation as Hedge Funds Prepare to Profit

Natural gas prices across Europe have been sent skyrocketing as of late, amid a combination...

Friday, September 17, 2021, 10:02:00 AM

Biden Administration Halts Approvals of New LNG Export Plants

The Biden administration has decided to pause the approval process for new liquified natural gas...

Thursday, January 25, 2024, 07:43:43 AM

Commodity Trader Trafigura Warns Europe’s Depleted Gas Reserves Could Create Rolling Blackouts This Winter

Swiss-based commodity trading giant Trafigura Group has warned that Europe’s severely depleted natural gas reserves...

Tuesday, November 16, 2021, 05:14:00 PM

‘More Bailouts, Please’: Uniper Would Need Up To €40 Billion From German Government — Sources

The German government needs to inject tens of billions of euros into Uniper to help...

Thursday, October 20, 2022, 02:22:00 PM