Why are natural gas prices over $8 this morning ???
Posted: Tue May 03, 2022 8:45 am
This is a subset of The Big Paradigm Shift. If the U.S. natural gas storage facilities do not fill A LOT in May, we will probably see double digit ngas prices within three months.
Trading Economics:
"US natural gas futures extended gains to above $7.8 per million British thermal units, close to an over thirteen-year high of $8.197, amid concerns that an early start to the cooling season could boost demand in May.
Weekly natural gas inventory injections are usually highest when demand for heating/cooling is lowest, which is during Spring and Fall. However, late-season wintry weather in April caused the gap between current storage levels and the 5-year average to widen to roughly 17%, and forecasts of hot weather in May may crippled utilities’ efforts to increase stocks ahead of next winter.
At the same time, output continued to face volatility amid the ongoing maintenance season.
Elsewhere, efforts by the EU to wean off Russian supplies have been keeping American export facilities running at near full capacity."
Just remember that "I told you so" in my weekly podcasts that we may witness the Mother of All Bidding Wars between the utility companies that deliver ngas to your home and the LNG exporters that take our relatively cheap gas to Europe and Asia. I will admit that I did not expect the bidding war to get this intense in May.
Trading Economics:
"US natural gas futures extended gains to above $7.8 per million British thermal units, close to an over thirteen-year high of $8.197, amid concerns that an early start to the cooling season could boost demand in May.
Weekly natural gas inventory injections are usually highest when demand for heating/cooling is lowest, which is during Spring and Fall. However, late-season wintry weather in April caused the gap between current storage levels and the 5-year average to widen to roughly 17%, and forecasts of hot weather in May may crippled utilities’ efforts to increase stocks ahead of next winter.
At the same time, output continued to face volatility amid the ongoing maintenance season.
Elsewhere, efforts by the EU to wean off Russian supplies have been keeping American export facilities running at near full capacity."
Just remember that "I told you so" in my weekly podcasts that we may witness the Mother of All Bidding Wars between the utility companies that deliver ngas to your home and the LNG exporters that take our relatively cheap gas to Europe and Asia. I will admit that I did not expect the bidding war to get this intense in May.