A Gradual Surge in Domestic Supply Reduces Natural Gas Prices in the USA
- 09-Sep-2022 5:28 PM
- Journalist: Jacob Kutchner
Houston, USA- Prices of Natural Gas are declining continuously as Freeport LNG has postponed its resumption from mid-October to November. The plant has undergone a turnaround as the facility caught fire and shut down last month, resulting in adequate Natural Gas supply in the domestic American market, leaving less to export abroad. Therefore, USA Natural gas prices fell because there was sufficient supply in the domestic market. The region's energy and utility costs are still high, with production cuts in the downstream derivative market. With the week ending on 7th September, Natural Gas spot prices decreased with lower benchmark futures for the forthcoming weeks. The Natural gas plant liquids price at Mont Belvieu, Texas, fell by 66 cents/MMBtu to the average of USD 10.72 per MMBtu.
According to the U.S. Energy Information Administration (EIA) report, the weekly availability of Natural gas among underground vessels increased in the USA. Compared with the previous week, Working Gas storage was 2694 billion cubic feet, with a net increase of 54 billion cubic feet.
In China, with increasing gas supplies and healthy imports from the USA and Saudi Arabia, the prices of Natural Gas showcased significant price reductions. On 08th September, the cost of Natural Gas in China slipped to USD 8.423 per MMBtu. Suppliers are storing the Natural Gas among the storage units to use it further in the upcoming winters. Prices are still on the upper side, affecting the downstream derivative market. The economic slowdown in China and a surplus of Natural Gas resulted in re-selling to energy-strapped Europe to reduce the inventories.
According to ChemAnalyst, the price of Natural Gas will fluctuate in the forthcoming weeks. In the USA, prices will slow further, prompted by sufficient domestic supply. However, exports from the USA to Europe will remain affected, increasing the prices in the overseas market. Downstream Methanol prices are growing with the utilization of existing inventories resulting in cost support for its downstream derivative demand.