A liquid natural gas (LNG) storage silo at the LNG terminal, operated by LNG Croatia LLC, in Krk, Croatia, on Monday, January 25, 2021.
Petar Santini | Bloomberg | Getty Images
U.S. natural gas prices rose to a 13-year high on Monday as Russia’s war against Ukraine causes a global energy crisis, and forecasts called for cooler spring temperatures.
The future jumped more than 6% to $ 7.80 per million thermal units in the UK, the highest since October 2008. The jump is gaining momentum, with natural gas coming out five weeks in a row.
“With strong violence and the ability to handle more of the upside blow that the market is ill-equipped, there will likely be significant continued gains in natural gas this summer,” EBW Analytics said. The company added that “changing weather” has introduced the US market “too much”.
For the year, U.S. natural gas prices have now risen 102%, raising inflation concerns across the economy. The move is only so extreme in Europe that natural gas futures have risen to record levels so that blocs can move away from Russian energy dependence.
The US is sending a record amount of liquefied natural gas to Europe, which is driving up Henry Hub’s prices.
“LNG exports have become more important with geopolitics and there is strong demand from energy generation and industrial use. Its role as a U.S. exporter continues to grow,” RBC said.
In the midst of the price jump, producers have kept production under control, and storage inventory is below the 5-year average, according to RBC.
“The backbone of LNG outflows, strong Mexican exports and the discipline of producers is fundamentally the backbone of construction,” the company added.
However, not everyone thinks that the rally will stop. Citi’s Henry Hub price target for 2022 rose 40 cents to $ 4.60 per British thermal unit, well below where the contract is currently marketed.
“[A] a combination of factors can increase demand and slow down production growth, but the market may overestimate their impacts as prices rise, ”the company said.
EQT Corp. and shares of natural gas producers Coterra Energy had a 52-week high in early Monday, each up more than 4%. Range Resources sold more than 3%.
Natural gas has risen to its highest level since 2008 as the Russian war overturns energy markets
Source link Natural gas has risen to its highest level since 2008 as the Russian war overturns energy markets