Natural gas prices hit lowest since April 2021 and have crashed 70% from highs as demand weakens
Jose A. Bernat Bacete/Getty Images
- US natural gas prices slumped 8% Thursday to hit the lowest level in nearly two years.
- At $2.80 per million British thermal units, the latest price represents a plunge of more than 70% from highs reached in August.
- US exports to Europe have also been limited by a longer-than-expected shutdown at an LNG facility.
US natural gas prices sank 8% Thursday to the lowest in nearly two years, as mild winter weather continued to weaken demand for the heating fuel.
Gas traded just below $2.81 per million British thermal units, the lowest level since April of 2021. Prices broke a key $3 threshold a day earlier.
The latest natural gas price represents a plunge of more than 70% from the high of $10.03 reached in August.
The sharp fall in natural gas prices is a stark reversal, following fears last year that Europe wouldn't have enough supply for frigid winter months.
The Russian invasion of Ukraine initially upended global energy markets, as Western governments imposed sanctions and Moscow cut off gas deliveries in retaliation.
But relatively mild winter weather in Europe and the US has helped add downward pressure to prices by keeping demand low.
At the same time, US gas production has climbed, adding to supplies. And a shutdown at a key Texas natural gas export hub has persisted longer than previously thought, limiting exports to Europe and boosting US inventories.
In addition, as gas inventories have not been tapped as much this winter in the Northern Hemisphere, inventories look to stay robust for next winter as well, even with Russian supplies still cutoff.
Hedge funds have turned the most bearish on US natural gas in almost three years, data from the Commodity Futures Trading Commission show, according to Bloomberg.
Contributer : Business Insider https://ift.tt/d1XKxoH
Reviewed by mimisabreena
on
Friday, January 27, 2023
Rating:
No comments:
Post a Comment