Because of rising heating demand, the price of natural gas in the United States is set to reach its highest level since 2008.
On Monday, U.S. natural gas futures rose about 5%, putting the contract on track for its highest close in 13 years, on higher-than-expected heating demand and as much higher global gas prices keep U.S. liquefied natural gas (LNG) exports near record highs.
At 9:37 a.m. EDT (1337 GMT), front-month gas futures (NG) rose 30.4 cents, or 4.8 % , to $6.582 per million British thermal units, putting the contract on track for its highest close since December 2008.
The price increase in the United States occurred despite the fact that global crude futures , brent fell by about 4% and European gas futures remained stable.
U.S. gas futures have risen nearly 74% this year, with much higher prices in Europe keeping demand for U.S. LNG near record highs as several countries try to wean themselves off Russian gas following Russia’s invasion of Ukraine on February 24.
One of the more surprising aspects of the recent price surge in the United States is that, while U.S. gas prices have risen about 40% in the last month, European gas, which is currently trading around $33 per mmBtu, has fallen about 23% as Russia continues to send supplies via pipeline and LNG vessels continue to deliver cargoes.
Analysts said that, in addition to high LNG demand, US prices were rising due to domestic concerns, such as growing concerns that cooler weather in April will keep heating demand high enough to prevent utilities from adding much gas to storage. Gas stockpiles in the United States were currently around 17% lower than the five-year (2017-2021) average for this time of year.
With LNG exports near record highs, U.S. gas speculators increased their net long futures and options positions on the New York Mercantile and Intercontinental Exchanges for the third week in a row for the first time since July 2021, according to the Commitments of Traders report from the Commodity Futures Trading Commission.
AccuWeather predicted that high temperatures in Calgary, the province’s largest city, would remain below freezing for the majority of this week. This compares to a typical high in the city this time of year of around 51 degrees Fahrenheit (10.6 Celsius).
Traders predicted that Alberta’s cold, which is expected to reach the United States next week, would reduce Canadian gas exports to the United States this week.
Despite recent gains, the US gas market remains largely immune to much higher global prices because the US, as the world’s largest gas producer, has enough fuel for domestic use and capacity constraints limit its ability to export more LNG regardless of how high global prices rise.
After April 8, the NYMEX suspends trading in Russian platinum and palladium.
The New York Mercantile Exchange Inc (NYMEX) has announced that platinum and palladium produced by two Russian refineries after April 8 will be ineligible for trading on the exchange.
Metals produced by Krastsvetmet and Prioksk after April 8 will be ineligible for warranting and delivery until further notice, according to a notice issued by exchange operator CME Group on Friday.
However, metals produced by those refineries prior to April 8 are still tradeable, according to the statement.
The suspension comes on the heels of a similar action by the London Platinum and Palladium Market, which blocked platinum and palladium produced by Krastsvetmet and the Prioksky Plant of Non-Ferrous Metals during the Ukrainian conflict.
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Source: XglobalMarkets
