US natural gas closed last week at $5.105 per British thermal unit, about double in half a year period and up 17% in September as inventory drawdowns worsened.
Fig: Natural Gas Futures Price
- Soaring natural gas prices are now causing worries about further shortages in the winter heating season.
- Whereas the US is in an offseason for demand currently, a series of weather events have depleted supplies leading to a supply-demand imbalance.
- The rise in natural gas prices is a challenge for the US, as rock-bottom prices have supported the economy since the financial crisis. The prices have now risen by the highest since 2014’s blizzards froze in the Northeast.
- Analysts now see natural gas prices reaching unknown heights in the winter, with further forecasts to hit the costliest levels in more than a decade.
Natural gas drilling rigs have remained the same since spring, despite the uptick in prices.
NG1! Is down -2.38%Source: WSJ