The average price of LNG delivered in October in Northeast Asia reached about $ 20.10 per million British thermal units (mmBtu), up $ 0.20 from the previous week. Prices for delivery in November rise to $ 21 / mmBtu, traders said.
The cost of LNG, used to generate electricity, increased tenfold, from $ 2 / mmBtu last year, when the COVID-19 pandemic reduced demand.
European traders are trying to replenish stocks before winter, when consumption increases. European inventories are currently below 70%, below the 85% average over 5 years, with the continent suffering from lower imports from Russia.
“We are pressed for time to replenish stocks before they cool,” says a London trader. “And there is not enough goods to meet demand in Asia and Europe.”
In the United States, natural gas futures prices rose to a seven-year high earlier this week, while European futures prices hit all-time highs.
Traders around the world buy all the liquefied gas that the United States can produce
In the US, gas prices have doubled this year and will continue to rise.
Natural gas is plentiful in the United States and has been cheap for years, so this year’s price increase is a remarkable fact, as it has increased the share prices of companies specializing in natural gas production, such as EQT, Range Resources, Cabot Oil. and Gas and Antero Resources.
In the futures market, the October gas contract rose to more than $ 5 per million British thermal units, or mmBtu, for the first time since February 2014.
Upward pressure on gas prices is global and the US is an exporter, prices in North America are now more influenced by prices in other markets.
Jack Fusco, CEO of Cheniere Energy, told CNBC that “as economies have begun to recover and countries and companies around the world have decided that natural gas is the preferred fuel for clean energy transportation, demand has just grown. ”
Fusco said prices for gas that is $ 5b in the US are now $ 20 or more in Europe and Asia. He also said that his company, which exports liquefied natural gas, has sold 90% of its production over the next 20 years.
Production is also lower due to Hurricane Ida, with 77.3% of deliveries in the Gulf of Mexico still stalled. According to the Energy Information Administration, the level of US stocks is 7.4% below the five-year average and 16.8% below last year’s level.
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