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U.S. Natural Gas Prices Could Soon Hit $10

Warmer than usual spring weather, expectations of a hotter summer, and record LNG exports to help Europe reduce dependence on Russian gas could send the U.S. benchmark natural gas prices to above $10 per million British thermal units (MMBtu) in the coming weeks, analysts say. 

Earlier this week, the front-month Henry Hub benchmark price hit a 13-year high of over $8/MMBtu, as prices rallied amid increased demand for air conditioning.

As of 9:50 a.m. EST on Friday, the natural gas price was at $8.693/MMBtu, down 1.02% on the day.

Moreover, the levels of natural gas in storage across the United States are well below average for this time of the year. 

The southern U.S. will be very warm to hot with highs of 70s to 90s, including highs near 100°F across Southwest deserts, Texas, and the S. Plains this weekend into the start of next week, according to an estimate from NatGasWeather of natural gas demand. 

“Warmer conditions will spread across the Midwest and eastern US late this weekend into next week with high 60s and 70s,” NatGasWeather notes.  

“Without production making significant gains, the market will not be able to handle things if this kind of heat sticks around,” Bespoke Weather Services says, as carried by Natural Gas Intelligence

“If that pans out, we feel we easily can go over $10 in prompt-month [pricing] over the next several weeks, barring massive supply gains,” Bespoke added. 

At the same time, higher demand for heating and record LNG exports left U.S. natural gas in storage at the end of the winter at its lowest level in three years, after larger-than-normal storage withdrawals this past winter, the Energy Information Administration (EIA) said last month. 

The EIA’s latest weekly natural gas report showed that working natural gas stocks totaled 1,567 Bcf in the week to April 29, which is 20% lower than the year-ago level and 16% lower than the five-year (2017–2021) average for this week.  

By Tsvetana Paraskova for Oilprice.com

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